EL SEGUNDO, Calif. -- Fresh & Easy Neighborhood Market Inc., the former Tesco PLC-owned small-format grocery chain that billionaire Ron Burkle bought in 2013, is preparing its second bankruptcy filing in two years, according to a Bloomberg report citing people familiar with the situation.
An application could come as soon as next week, said the people, who asked not to be identified because the process isn’t public. The company could still find a buyer for all or part of the chain, a move that may forestall a filing, the people told the news agency.
A Fresh & Easy representative refuted Bloomberg’s report.
“Fresh & Easy has been in the process of restructuring since transitioning to new ownership two years ago, most recently closing a number of unprofitable stores,” company spokesperson Brendan Wonnacott told Bloomberg. “The company has not made a decision relative to the use of court assistance in the restructuring process.”
An affiliate of Burkle’s investment firm, Yucaipa Cos., bought most of Fresh & Easy’s assets after it sought protection from creditors in 2013.
The chain, created by British retail giant Tesco in 2007, promised low prices on natural and organic foods, takeout meals and speedy self-checkouts for time-pressed shoppers. The company filed for bankruptcy after losing millions of dollars on the American experiment. Tesco invested about $1.6 billion in the venture before deciding to bail out.
The Yucaipa purchase included 167 stores, as well as distribution and manufacturing facilities in Riverside, Calif. Stores that were not purchased were closed. Fresh & Easy is now down to 100 stores from a high of 200.
Led by former 7-Eleven executive Jim Keyes, Fresh & Easy launched a turnaround plan that called for stores to focus on convenience, low prices, ready-to-eat meals, wider selection of craft beer and more fresh foods. Stores also expanded hours, with some open 24 hours.
One of the biggest changes was bringing back the defunct Wild Oats organic brand to store shelves.
But the tweaks didn’t move the needle at some stores, said the report.
Keyes has consistently declined to talk to the media about his plans for the chain. One idea that never came to fruition was designing a “Fresh & Easy store of the future.” The company had said it was working with a design firm used by Apple, but those plans have stalled, the report said.
Fresh & Easy, based in El Segundo, Calif., now has about 100 stores. Tesco retains a stake in the business.
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