More Fresh & Easy properties sold - The Packer

More Fresh & Easy properties sold

01/10/2014 04:52:00 PM
Coral Beach

A New York City investment company has the OK from a bankruptcy judge to buy 53 pieces of property from Fresh & Easy Neighborhood Markets Inc. as the retail chain winds down operations seven years after Tesco PLC launched it.

Judge Kevin Carey of Delaware’s Bankruptcy Court approved the $41.5 million sale to EM-80 UAV Darko LLC, a company associated with Fortress Investment Group. The bid from Darko was the highest of 23 submitted. About 70 potential buyers had expressed interested in some or all of the parcels, according to court documents.

The judge also gave the final OK on Nov. 22 for Los Angeles-based Yucaipa Companies LLC to buy more than 150 Fresh & Easy retail stores from Tesco. Tesco is financing the sale with a $120 million loan. Another 50 stores will be closed.

The sale of the stores and the 53 pieces of other real estate came after Fresh & Easy filed for chapter 11 bankruptcy protection in late September as its parent company prepared to sell the chain. Fresh & Easy owes between $500 million and $1 billion, according to court records.

Tesco’s chief executive officer made statements in late 2012 regarding Fresh & Easy’s lack of profitability. He said the chain was not able to sustain the $1.6 billion investment Tesco had made. However, for the 12 months ending Feb. 24, 2013, Fresh & Easy generated about $1.1 billion in revenue, according to court documents.

Documents show the chain’s stores, distribution center and other assets were valued at $362.8 million, as of February. In addition to the 150 stores, Yucaipa also is buying a distribution center and a production plant in Riverside, Calif.

About 4,000 Fresh & Easy employees will transfer to work under the Yucaipa ownership, according to a news release. James Keyes, former chief executive of 7-Eleven Inc., negotiated the deal with Tesco and has been hired by Yucaipa to design a success strategy for the Fresh & Easy chain, according to the news release.

The 53 parcels of real property Darko is buying are in California, Arizona and Nevada. Twenty of the parcels have buildings, and the other 33 are land-only pad sites, end-caps and in-line locations. One property has a 44,000-square-foot building, with the other buildings ranging from 14,000 to 17,000 square feet.

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Tracey Tortorice    
Las Vegas  |  January, 12, 2014 at 04:42 PM

I was shopping at fresh and easy with my sister, who has been shopping at these stores for quite some time. She has been completely satisfied, until, they were bought out through a bankruptcy sale. Not only have they discontinued the coupons, but, they have raised the prices,rearranged the stores and discontinued many products. I personally did not see any advantages to shopping there. I believe you may have lost another customer.

February, 06, 2014 at 11:35 PM

It's a 7-11 with more groceries. I do no see this company lasting another year. Our store was rather successful typically packed with customers. Now, it's eerily empty. The shelves carry less inventory. Some bone head re-arranged the pre-prepared food to another case. Many of the quality F&E products are gone or being replaced with lesser quality items. They use to carry il fornaio backed goods. Now all they have is generic tasteless crap. It's a real depressing place to shop at. Frankly, we re-shifted our spending to trader Joes and Whole foods.

J R    
Long Beach, CA  |  February, 09, 2014 at 01:47 PM

The stores around my area had a couple of weeks that seemed like there were less customers, but in recent weeks, they've all been pretty packed. I knew for certain that the new owners, whoever they would be, would drop or reconfigure the coupon system. It looks like the new owners are creating a model of higher margins and less customers to sustain profitability. Sure there were more customers before, but with those coupons taking an average of 20% off? 20% is a HUGE cut into a grocery store's profit margin - and profit margins for grocery stores are already paper-thin. The new F&E still has coupons and price-points that are between "same as" to "less than" Trader Joe's. I know because I regularly shop both. And anyone who claims TJ's, let alone Sprouts or Whole Foods, is cheaper than F&E, is just plain SO angry about the loss of F&E coupons, that they'll say anything to slam the new company. It's really the former owner Tesco's fault for maintaining a money-losing system, and getting half of their consumers hooked on the coupons while creating a false impression that F&E was intended to be some kind of discount grocer. Hopefully those consumers who put pricing above product-type (like organics / artificial preservative / no-HFCS / gluten-free that F&E brands are or are available as) will find a place that meets their needs, maybe Aldi stores when they open. Even though a lot of people are still ticked about the coupons changing, it does look like - at least from the stores in our area (Long Beach / South Bay) - that F&E is successfully forming its new customer base.

Location  |  March, 06, 2014 at 11:13 AM

What a sycophant! They will fail. First mistake? Hiring a CEO with a miserable history of mistakes with other companies. Second mistake? Same employees at main office and warehouse that continue to make the same mistakes with the same excuses and no accountability. Third mistake? Same awful HR/ER department and same awful IT department!

Nor-Cal  |  April, 20, 2014 at 11:27 PM

Really, hiring Jim Keys to try and bring back Fresh and Easy. What a joke. He personally made the decisions that brought down blockbuster. When he was CEO at blockbuster he was quoted as saying things like that he didn't understand netflix or redbox business strategy and didn't see them as a threat in any way to their business so they didn't need to worry about them taking their customers. He also decided not to launch the blockbuster streaming box at first and then, after Netflix handed them their butts, he tried to launch it, but it was too late people had already bought into Netflix. After making these terrible decisions his strategy to turn blockbuster around was to try and sell the equipment that went along with movies, like tvs, home theaters and DVD players. That was a total failure, so then he tried to turn blockbusters in to the only thing he knew, a store that sells fountain drinks and candy. Why would someone go to blockbuster for convenient store items. Made no sense. With Jimmy at the helm F&E is taking its last breath.

Rebecca H    
San Diego  |  April, 30, 2014 at 03:16 PM

Fresh & Easy was a regular stop for me, often I would go there several times a week. Now however I have noticed the prices being raised and the quality of products suffering. Several items that I loved have been discontinued and their bread selection (once fabulous) is terrible. Shopping there is an exercise in frustration and disappointment, Trader Joe's will get my business.

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