Fairway Group Jumps in Trading After Pricing IPO Above Range

Fairway Group Holdings Corp. (FWM), the grocery-store chain focused on greater New York, surged 33 percent in its public debut after pricing its initial stock offering above the proposed range.

The stock climbed to $17.35 at the close in New York after advancing 42 percent to $18.41. Fairway and existing owners raised $177.5 million selling 13.65 million shares for $13 each, according to a statement, after offering them for $10 to $12. The shares, which represent a 33 percent stake, are listed on the Nasdaq Stock Market under the symbol FWM.

New York-based Fairway expects about $159 million of net proceeds from the IPO and is valued at about $536 million at the IPO price, according to the statement and data compiled by Bloomberg. The grocer, which started as a small neighborhood market in the 1930s, sold shares publicly after expansion in suburban New York, New Jersey and Connecticut helped boost sales for at least three years in a row.

The food seller, which has 12 locations, said in a regulatory filing that it’s planning to add stores in population-dense metropolitan areas and has the potential for more than 300 new U.S. shops. Sales at Fairway rose 14 percent to $554.9 million in the year ended April 1, 2012. The company had a net loss of $11.9 million that year.

Photographer: Victor J. Blue/Bloomberg

New York-based Fairway Group Holdings Corp. expects about $159 million of net proceeds from the IPO and is valued at about $536 million at the IPO price, according to the statement and data compiled by Bloomberg. Close

New York-based Fairway Group Holdings Corp. expects about $159 million of net proceeds... Read More

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Photographer: Victor J. Blue/Bloomberg

New York-based Fairway Group Holdings Corp. expects about $159 million of net proceeds from the IPO and is valued at about $536 million at the IPO price, according to the statement and data compiled by Bloomberg.

Sales at U.S. grocery stores may begin to increase after falling 2.1 percent in 2012, according to a report from industry researcher IBISWorld Inc. in Santa Monica, California. Revenue is projected to rise 0.4 percent a year, on average, and reach $500.9 billion in 2017, the data show.

IPO Resurgence

Fairway joins companies in industries from technology to energy that are taking advantage of greater investor appetite for new equities as U.S. stocks surge to record highs this year. U.S. IPOs raised 37 percent more last quarter than they did in the year-earlier period, according to data compiled by Bloomberg.

Fairway competes with Austin, Texas-based Whole Foods Market Inc. (WFM) and closely held Trader Joe’s, as well as big-box discounters Target Corp. (TGT) and Wal-Mart Stores Inc. (WMT) Fairway stores sell organic milk and baby food, as well as gluten-free breads and pancake mix.

Credit Suisse Group AG, Bank of America Corp., Jefferies Group Inc. and William Blair & Co. led the offering.

To contact the reporter on this story: Lee Spears in New York at lspears3@bloomberg.net

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net

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