{"id":68392,"date":"2015-12-08T09:58:10","date_gmt":"2015-12-08T14:58:10","guid":{"rendered":"http:\/\/thesocietypages.org\/socimages\/?p=68392"},"modified":"2017-09-17T20:43:42","modified_gmt":"2017-09-18T01:43:42","slug":"winners-losers-and-the-business-of-buyouts-a-case-study","status":"publish","type":"post","link":"https:\/\/thesocietypages.org\/socimages\/2015\/12\/08\/winners-losers-and-the-business-of-buyouts-a-case-study\/","title":{"rendered":"Winners, losers, and the business of buyouts"},"content":{"rendered":"

\u201cThat\u2019s private equity for you,\u201d said Steve Jenkins. He was standing outside the uptown Fairway grocery at 125th St. about to go to breakfast at a diner across the street. He no longer works at Fairway.<\/p>\n

Steve was one of the early forces shaping Fairway back when it was just one store at 74th and Broadway. He hired on as their cheese guy. \u201cWhat do you want that for?\u201d he growled at me one day long ago when he saw me with a large wedge of inexpensive brie. \u201cThat\u2019s the most boring cheese in the store.\u201d He was often abrasive, rarely tactful. I tried to explain that it was for a party and most of the people wouldn\u2019t care. He would have none of it. He cared. He cared deeply \u2013 about cheese, about food generally.<\/p>\n

He helped Fairway expand from one store to two, then four. He still selected the cheeses. He wrote the irreverent text for their signs, including the huge electric marquee that drivers on the West Side Highway read. And then in 2007 Fairway got bought out by a private equity firm. The three original founders cashed out handsomely. Steve and others stayed on. Much of their their share of the deal was in Fairway stock, but with restrictions that prevented them from selling.<\/p>\n

Fairway kept expanding \u2013 stores in more places around New York \u2013 and they aimed more at the median shopper. Gradually, the store lost its edge, its quirkiness. With great size comes great McDonaldization \u2013 predictability, calculability. \u201cLike no other market,\u201d says every Fairway sign and every Fairway plastic bag. But it became like lots of other markets, with \u201cspecials\u201d and coupons. Coupons! Fairway never had coupons. Or specials.<\/p>\n

The people who decided to introduce coupons and specials were probably MBAs who knew about business and management and maybe even research on the retail food business. They knew about costs and profits. Knowing about food was for the people below them, people whose decisions they could override.<\/p>\n

\u201cI gotta get permission from corporate if I want to use my cell phone,\u201d said Peter Romano, the wonderful produce manager at 74th St. \u2013 another guy who\u2019d been there almost from the start. He knew produce like Steve knew cheese. Peter, too, left Fairway a few months ago.<\/p>\n

Maybe this is what happens when a relatively small business gets taken over by ambitious suits. Things are rationalized, bureaucratized. And bureaucracy carries an implicit message of basic mistrust:<\/p>\n

If we trusted you, we wouldn\u2019t make you get approval. We wouldn\u2019t make you fill out these papers about what you\u2019re doing; we\u2019d just let you do it. These procedures are our way of telling you that we don\u2019t trust you to do what you say you\u2019re doing.<\/p><\/blockquote>\n

The need for predictability, efficiency, and calculability leave little room for improvisation. The food business becomes less about food, more about business. It stops being fun. The trade-off should be that you get more money. But there too, Fairway\u2019s new management disappointed. They expanded rapidly, putting new stores in questionable locations. In the first months after the private equity firm took Fairway public in 2013, the stock price was as high as $26 a share. Yesterday, it closed at $1.04. The shares that Steve Jenkins and others received as their part of the private equity buyout are practically worthless.<\/p>\n

\"4\"<\/a><\/p>\n

Steve Jenkins will be all right. He\u2019s well known in food circles. He\u2019s been on television with Rachel Ray, Jacques Pepin. Still, there he was yesterday morning outside the store whose cheeses and olive oils had been his dominion. \u201cI\u2019m sixty-five years old, and I\u2019m looking for a job.\u201d<\/p>\n

Originally posted at Montclair SocioBlog<\/a>; re-posted at Pacific Standard<\/a>.<\/em><\/p>\n Jay Livingston is the chair of the Sociology Department at Montclair State University<\/a>. You can follow him at Montclair SocioBlog<\/a> or on Twitter<\/a>.<\/span>","protected":false},"excerpt":{"rendered":"

\u201cThat\u2019s private equity for you,\u201d said Steve Jenkins. He was standing outside the uptown Fairway grocery at 125th St. about to go to breakfast at a diner across the street. He no longer works at Fairway. Steve was one of the early forces shaping Fairway back when it was just one store at 74th and […]<\/p>\n","protected":false},"author":258,"featured_media":68395,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[29,36,98,23633,2124,76],"class_list":["post-68392","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-class","tag-economics","tag-capitalism","tag-economics-corporations","tag-foodagriculture","tag-work"],"jetpack_featured_media_url":"https:\/\/thesocietypages.org\/socimages\/files\/2015\/11\/72.png","_links":{"self":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/68392","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/users\/258"}],"replies":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/comments?post=68392"}],"version-history":[{"count":6,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/68392\/revisions"}],"predecessor-version":[{"id":71772,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/68392\/revisions\/71772"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/media\/68395"}],"wp:attachment":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/media?parent=68392"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/categories?post=68392"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/tags?post=68392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}