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By Randy Economy
“In October, we announced that new capital investment in Fresh & Easy was to be tightly constrained whilst the business focused on reducing costs and improving the profitability of its existing stores,” a media release for Tesco stated.
“It is now clear that Fresh & Easy will not deliver acceptable shareholder returns on an appropriate time frame in its current form. We have therefore appointed Greenhill to assist with the review of options. In recent months, we have had a number of approaches from parties interested in acquiring either all or part of Fresh & Easy, or in partnering with us to develop the Fresh & Easy business. We will communicate progress on this process when we present our full year results for the current financial year in April 2013,” the statement continued.
Tesco also announced that CEO Tim Mason is to leave Tesco after 30 years’ service with the company.
“I have been clear since my appointment as CEO was announced that my role is to deliver long-term value for shareholders. Following a year in which my priority for Fresh & Easy was to improve its performance, I have now made a fully informed assessment of its longer term potential,” said Philip Clarke with Tesco.
“Whilst the business has many positives, its journey to scale and acceptable returns will take too long relative to other opportunities. I have therefore decided to conduct a strategic review of Fresh & Easy, with all options under consideration.
“Tim Mason, who leaves Tesco today, has played an important part in our success over a 30 year career with the company, and he leaves with my thanks and good wishes,” Clarke said.
Several media outlets have confirmed that all of Fresh and Easy’s locations in Southern California will be closed.
On the Fresh & Easy Facebook Page the following statement was released:
“You may have read today that our parent company, Tesco, has announced a ‘strategic review’ of fresh&easy. We wanted to reassure you, as our friends and greatest supporters, that we are open for business as usual and we look forward to bringing the same delicious, wholesome, and affordable food and the same great service that you have come to expect from us every day. We appreciate all of the support and affirmations of “We ♥ fresh&easy” from our community of team members, neighbors and customers that we’ve been seeing today!”
“British parent Tesco is ready to sell or close the El Segundo-based chain’s 199 stores in what has proven to be a very costly ($1.6 billion) and unsuccessful effort to break into the American market,” the Wall Street Journal confirmed late Wednesday afternoon.
Fresh & Easy operates locations in Norwalk, Buena Park, and several other locations throughout Southern California.
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