LOS ANGELES -- Fresh & Easy may have found a buyer, and a familiar executive to lead the venture. Billionaire Ron Burkle is said to be in talks to buy Tesco Plc's unprofitable Fresh & Easy Neighborhood Market Inc. small-format grocery chain in the western United States and plans to use the stores to relaunch the Wild Oats brand, said a Bloomberg report.
As reported in a Raymond James/CSP Daily News Flash on Wednesday, Jim Keyes, the former CEO of 7-Eleven Inc. and Blockbuster Inc., owns the Wild Oats name and will serve as CEO of the new grocery retail venture, people familiar with the discussions and who asked not to be identified because the process isn't public, told the news agency.
Keyes left Dallas-based 7-Eleven in November 2005 after it was purchased by Japanese retail company Seven & I Holdings Inc. He joined Blockbuster in July 2007.
A spokesperson for El Segundo, Calif.-based Fresh & Easy would neither confirm nor deny the report for CSP Daily News. "We don’t comment on rumor or speculation," he said.
Burkle is the founder of private-equity company Yucaipa Cos., based in Los Angeles.
Fresh & Easy, with about 200 stores in Nevada, California and Arizona, hasn't made a profit since it was built up from scratch in 2007. Tesco invested about $1.6 billion in the country before deciding that the chain, which targeted urban areas with private-label food, was a drain on earnings and management time and to sell it.
CFO Laurie McIlwee said on June 5 that Tesco was "in advanced discussions with a number of parties interested in taking over Fresh & Easy in its entirety."
Burkle has sought investments and stakes in troubled companies, including a partnership to take over Barneys New York last year. He was also interested in buying part of grocery chain SuperValu Inc., people familiar with the matter told the news agency. Eden Prairie, Minn.-based SuperValu sold some of its banners, including Jewel-Osco and Acme, to a Cerberus Capital Management LP-led team in March.
An entity with Yucaipa's address has applied to open grocery retail stores, according to the trademark application that was published for opposition on May 21. The owner of the filing is listed as Wild Oats Marketing LLC, said the report.
Whole Foods Market Inc. bought Wild Oats in 2007. At the time, Wild Oats had 109 locations and annual sales of about $1.2 billion, according to a statement from Austin, Texas-based Whole Foods.
Wild Oats was a pioneer in organic and natural foods and opened its first store in Boulder Colorado back in 1987. By early 2007, Wild Oats operated 110 stores in 24 states and in Canada, making it the nation's second-largest natural and organic food chain. Wild Oats is planning a comeback to grocery-store shelves, according to the company's website. This year, it will sell branded cereals, coffee, dry beans, pretzels and other foods at U.S. supermarkets.
Ron Burkle founded investment firm The Yucaipa Cos., based in Los Angeles, in 1986. It 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. Burkle is recognized as one of the preeminent investors in the retail, manufacturing, distribution and hospitality industries. He has served as chairman and controlling shareholder of numerous companies including Alliance Entertainment, Golden State Foods, Dominick's, Fred Meyer, Ralphs and Food4Less.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.