Could Keyes Unlock Fresh & Easy's Success?
Sources ramp up speculation that former 7-Eleven CEO taking helm at newly acquired chain
EL SEGUNDO, Calif. -- Despite corporate silence and denials, stronger rumors surfaced this week that Jim Keyes, the former chairman and CEO of 7-Eleven Inc. and Blockbuster Inc., will be named to lead the Fresh & Easy chain, which The Yucaipa Co. has acquired from Tesco PLC as the U.K. retail giant exits the U.S. market.
In a deal announced last week, Yucaipa will acquire more than 150 of the chain's 200 stores as well as Fresh & Easy's Riverside distribution and production facilities.
Previous reports indicated that Keyes, who owns the Wild Oats natural foods brand--formerly a retail brand attached to more than 100 grocery stores, which Whole Foods Inc. acquired in 200--would serve as CEO of the new venture.
Citing industry sources, Supermarket News reported that Keyes and Tim Ashdown, Fresh & Easy's CEO, were meeting with Fresh & Easy employees at the company's stores and distribution center this week to discuss long-term plans for the company once Yucaipa completes the transaction in the next few weeks.
Officials at Yucaipa, the Los Angeles-based investment firm managed by Ron Burkle, did not respond to the industry publication's request for comment.
Fresh & Easy spokesperson Brendan Wonnacott declined to confirm Keyes' appointment; he told CSP Daily News that no announcement has been made and that the rumors were "just rampant speculation in the press."
In announcing the deal, Burkle said, "We plan on continuing to build Fresh & Easy into a 'next-generation convenience retail experience'."
James Tenser of Tuscon-based VSN Strategies, told Produce Retailer that he expects the Fresh & Easy banner to remain active, which is consistent with Yucaipa's other acquisitions. "Longer term, I might anticipate an overhaul of the merchandising concept," he said. Nased on Burkle's comment, he said he expects to see "more grab-and-go convenience foods, a mobile app and maybe a gourmet touch."
Tenser said Keyes is a strong candidate if Yucaipa wants to bring in a convenience oriented leader. "If it's true, I don't necessarily see his convenience store background to be as important as his gravitas as a CEO," he told the publication. "I see him as a potential transition figure who is willing to make some of the tough calls needed to reconfigure the business, then pass the mantle to a more operationally oriented leader in a year or so."
Retail expert Gerald Lewis considers Keyes' appointment "a likely scenario."
Fresh & Easy Neighborhood Market Inc., with headquarters in El Segundo, Calif., opened its first stores in Nov. 2007 and has 200 locations in California, Nevada and Arizona.
Los Angeles-based Yucaipa is a major investment firm that has established a record of fostering economic value through the growth and responsible development of companies. Founded in 1986 by Ron Burkle, the firm has completed mergers and acquisitions valued at more than $30 billion. As an investor, Yucaipa works with management to strategically reposition businesses and implement operational improvements, resulting in value creation for investors.