Yucaipa closes on acquisition of Fresh & Easy
by Eric Schroeder
EL SEGUNDO, CALIF. — Private investment firm Yucaipa Companies L.L.C. has acquired Fresh & Easy Neighborhood Market from London-based Tesco P.L.C. Yucaipa on Nov. 22 received approval from the U.S. Bankruptcy Court for the District of Delaware to go ahead with the transaction, which is being financed with a $120 million loan by Tesco.
Yucaipa said it plans to build Fresh & Easy into a “healthy convenient food experience,” providing consumers with more local and healthy access for their daily needs. In addition, Fresh & Easy’s existing infrastructure offers a “tremendous” foundation from which to build even stronger capabilities to provide the highest level of freshness and convenience available, Yucaipa said.
As part of the transaction, Yucaipa netted 150 Fresh & Easy stores, a distribution center and a production plant in Riverside, Calif. Four thousand Fresh & Easy employees also will transfer to the new business. James Keyes, former chief executive officer of 7-Eleven Inc., has been hired to design a successful strategy for Fresh & Easy. He also negotiated the deal with Tesco.
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.
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 Co.