Fresh & Easy Starts to 'Wind Down'
Unable to find financing, small-format grocery chain will close its doors
EL SEGUNDO, Calif. -- Troubled former Tesco PLC-owned small-format grocery chain Fresh & Easy Neighborhood Market Inc. is starting "the process for an organized wind down of the business," according to a company spokesperson
"Over the last two years, we have been working hard to build a new Fresh & Easy," Brendan Wonnacott said in a statement provided to CSP Daily News. "While we made progress on stemming our losses and moving the business closer to break even, unfortunately we have been unable to obtain financing and the liquidity necessary to continue to fund the business going forward. As we start the process for an organized wind down of the business, we continue to work to sell all or part of the business."
Last week, sources familiar with the company's financial situation told Bloomberg News that Fresh & Easy was preparing to file its second bankruptcy in two years. The company denied the rumors.
Stores are being liquidated and closed over the next few weeks, reported The Los Angeles Times, citing a person with knowledge of the situation who is not authorized to speak publicly. Layoffs are starting in the corporate office next week, the person told the newspaper. State-mandated "WARN Act" layoff notices have gone out to about 3,000 employees.
An affiliate of billionaire Ron 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 Bloomberg.
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.