Former United States Securities and Exchange Commission attorney Willie Briscoe, founder of The Briscoe Law Firm, PLLC, and the securities litigation firm of Powers Taylor LLP announce that a federal class action lawsuit has been filed against Fairway Group Holdings Corp. (“Fairway” or “Company”) (NasdaqGM: FWM) and several of its officers and directors in connection with Fairway’s April 17, 2013 initial public stock offering (“IPO”) Registration Statement.
If you are an affected Fairway shareholder and want to learn more about the lawsuit or join the action, contact Willie Briscoe at The Briscoe Law Firm, PLLC, (214) 239-4568, or via email at WBriscoe@TheBriscoeLawFirm.com, or Patrick Powers at Powers Taylor LLP, toll free (877) 728-9607, or via email at firstname.lastname@example.org. There is no cost or fee to you.
The complaint alleges Defendants violated the Securities Exchange Act of 1934 by misrepresenting and/or failing to disclose that (i) Although Fairway’s operations had expanded exponentially, the founders’ families continued to maintain significant operational control and had not allowed the required structural changes to its operations or management structure necessary to support its growth; (ii) Due to the lack of structural or operational changes Fairway had millions of dollars of redundant costs; (iii) Despite the Registration statement’s description, Fairway’s CEO would suddenly and without explanation resign less than one year following the IPO without a replacement, or a CEO succession plan in place, causing the stock price to plummet while Fairway scrambled to locate a CEO; (iv) Even though Fairway was increasing its absolute sales dollars through new store openings, sales at its stores open at least a full year were actually in decline at the time of the IPO; (v) As the shift from small family-run stores into a larger, corporate grocery store chain occurred, Fairway began to feel competitive pricing pressure from other “organic” and “fresh” food grocery chains, running down the higher prices it had once been able to maintain as well as its profit margins; (vi) Due to pre-Super Storm Sandy sales, Fairway’s 2012 sales had been significantly enhanced, which was not something Fairway was on track to replicate in 2013; and (vii) In February 2013 Fairway had signed a 20-year lease, in a space that had experienced significant turn-over, at an inordinately high rent of $150 a square foot, very close to its competitors, which would destine this new store to drain the Company’s financial results as its projected sales would not support its higher operational costs. According to the complaint, when the truth was revealed to the market, Fairway stock plummeted approximately 37% from the IPO price.