Fairway surges after IPO

April 17, 2013: 4:24 PM ET
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NEW YORK (CNNMoney)

Fore!

Shares of Fairway Group Holdings (FWM) finished up more than 33% Wednesday after the New York-based grocery chain priced its initial public offering at $13 a share, above the expected range of $10 to $12.

Fairway, which began trading on the Nasdaq Wednesday, climbed as high as $18.41 before closing at $17.35.

The company reaped $158.8 million from the offering (after fees and commissions), and said it plans to use the proceeds primarily for "new store growth and general corporate purposes."

Related: Dividends, the IPO market's hottest craze

Fairway specializes in organic and gourmet products, competing with chains like Whole Foods (WFM) and Trader Joe's.

Its net sales hit $555 million for the 2012 fiscal year, up from $486 million in 2011 and $401 million in 2010, according to Securities and Exchange Commission filings. The chain is expanding aggressively, however, and has reported losses over the past three years as a result.

Fairway lost roughly $12 million in the 2012 fiscal year, and said it expects to remain in the red at least through 2014.

Fairway currently boasts a dozen locations concentrated around the New York City metropolitan area. Its Red Hook, Brooklyn, store was forced to close from October until March of this year after its inventory was destroyed by Superstorm Sandy.

There have been 43 IPO's on U.S. markets so far in 2013, with an average first-day pop of 11.7%, according to DealLogic.

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