EL SEGUNDO (CBSLA.com) — An equity firm controlled by billionaire Ron Burkle announced Tuesday that is will buy Fresh & Easy Neighborhood Market from U.K.-based Tesco.
While the terms of the deal have not yet been 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 customer. 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.”
Founded in 1986, Yucaipa Cos. has used leveraged buyouts to acquire majority positions in grocery store chains, including Ralphs and Kroger.
Recently, Ucaipa purchased a stake in The Great Atlantic & Pacific Tea Co., as well as Barney’s New York.
Tesco’s CEO, Philip Clarke, suggested that the sale was the best thing for Tesco shareholders as well as for 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,” Clarke said.
Around 50 of Fresh & Easy’s 200 locations nationwide will close, according to company spokesman Brendon Wonnacott.
Fresh & Easy, which had targeted California and the Southwest when it entered the U.S. market in 2007, has about 200 stores nationwide and a distribution hub in Riverside, but has steadily lost profits.
Wonnacott suggested it was too early to know which stores would close. While most of the 4,000 Fresh & Easy employees would keep their jobs under Yucaipa’s ownership, some employees would be laid off, according to Wonnacott’s statement.
Fresh & Easy’s U.S. headquarters are in El Segundo.
Tesco is the No. 3 retailer in terms of worldwide sales, behind Wal-Mart stores Inc. and Carrefour SA.
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