LOS ANGELES – Yucaipa Companies L.L.C., a private investment firm, has entered into an agreement with London-based Tesco PLC to acquire 150 Fresh & Easy stores, a distribution center and a production plant in Riverside, Calif., for an undisclosed amount. Four thousand Fresh & Easy employees also will transfer to the new business once the transaction is completed.
Fresh & Easy operates 200 stores in Arizona, California and Nevada and employs 5,000. Those stores not included in the sale to Yucaipa will be closed in the coming weeks, according to Tesco. A list of the stores to be closed was not available.
“Fresh & Easy is a tremendous foundation,” said Ron Burkle, managing partner of Yucaipa. “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.”
Tesco launched the Fresh & Easy concept in 2007. The company’s goal was to introduce a retail format in the United States that was smaller, easier to navigate than the stores of larger retailers and able to deliver fresh foods to consumers at an affordable price.
In December 2012, Tesco said it was conducting a strategic review of the Fresh & Easy format because the chain was not delivering an acceptable shareholder return. In April 2013, the retailer said it planned to sell Fresh & Easy and exit the U.S. market.
“The decision we are announcing today represents the best outcome for Tesco shareholders and Fresh & Easy’s stakeholders,” said Philip Clarke, chief executive officer of Tesco. “It offers us an orderly and efficient exit from the U.S. market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy.”
Yucaipa Companies has experience in the retail sector. Past investments by the company include Food 4 Less, Ralph’s Grocery Co., Dominick’s Chicago and The Great Atlantic & Pacific Tea Company.