Tuesday, September 10, 2013
The equity firm controlled by billionaire Ron Burkle announced today it is buying Fresh & Easy Neighborhood Market from U.K.-based Tesco, but terms of the deal were not released.
The deal, in which Yucaipa Cos. will assume the Fresh & Easy's debt, is expected to be completed in about three months.
"Fresh & Easy is a tremendous foundation,'' Burkle said. "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. We plan on continuing to build Fresh & Easy into a "next-generation convenience retail experience,'' providing busy consumers with more local and healthy access for their daily needs.''
Yucaipa Cos., founded in 1986, has used leveraged buyouts to acquire majority positions in grocery store chains such as Ralphs and Kroger. More recently, Yucaipa Cos. bought a stake in The Great Atlantic & Pacific Tea Co. and Barney's New York.
About 50 of Fresh & Easy's roughly 200 stores nationwide will close, company spokesman Brendan Wonnacott said, but added that it was too early to know which ones because negotiations regarding the sale were ongoing.
Philip Clarke, Tesco's chief executive, said the sale to Yucapia Cos. was the best for Tesco shareholders and Fresh & Easy's stakeholders.
"It offers us an orderly and efficient exit from the US market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy,'' he said.
Fresh & Easy, which targeted California and the Southwest when it made an untimely U.S. entrance in 2007, has about 16 store in San Diego County. It also has a distribution hub in Riverside.
Tesco is the No. 3 retailer worldwide in terms of sales, behind Wal-Mart Stores Inc. and Carrefour SA.
In 2012, Tesco took a $1.17 billion charge on its U.S. stores, and Fresh & Easy reportedly has about $235 million in debt.