Fresh & Easy to Close Unsold Stores in Wake of Yucaipa Acquisition
Fresh & Easy has announced plans to shut down some of its stores in the wake of Yucaipa’s acquisition of the business.
Ron Burkle’s investment firm, Yucaipa, has agreed to take on 150 of Tesco’s Fresh & Easy stores, along with 4,000 employees and its Riverside distribution center and production facility. Consequently, the approximate 50 remaining Fresh & Easy stores not included in the agreement will be closed. However, Fresh & Easy spokesperson Brendan Wonnacott has confirmed that the company is still seeking buyers for these remaining locations. The deal will cost Tesco £150m, including the loan and payoffs for nearly 400 permanent staff, bringing the total cost to nearly £2bn. Unfortunately, the future for a further 600 staff is unclear, with some expats likely to return to Tesco in the UK while others are part-time staff and will be let go, according to The Guardian.
“The decision we are announcing today represents the best outcome for Tesco shareholders and Fresh & Easy’s stakeholders,” said Philip Clarke, Tesco Chief Executive Officer. “It offers us an orderly and efficient exit from the U.S. market, while protecting the jobs of more than 4,000 colleagues.”
Ron Burkle commented: “Fresh & Easy is a tremendous foundation. Tesco should be applauded for giving their customers an affordable, healthy, convenient shopping experience. Its dedicated employees and great base of customers give us a solid starting point to complete Tesco’s vision with some changes that we think will make it even more relevant to today’s consumer.”
Burkle also mentioned that he planned to build the Fresh & Easy chain into a “next-generation convenience retail experience.” However, The Guardian also reports that Burkle wants to use the Fresh & Easy stores to re-launch his Wild Oats brand, which he sold to rival Whole Foods Market in 2007.
Stay tuned to AndNowUKnow as we continue to follow further developments.