By CNBC, Friday, October 30, 2015
Investor Burkle’s Fresh & Easy grocery chain files for bankruptcy
Oct 30 (Reuters) – Fresh & Easy filed its second bankruptcy in two years on Friday after billionaire Ron Burkle was unable to turn around the West Coast grocery chain, which is in the process of closing down.
Burkle’s Yucaipa Cos investment firm agreed to acquire more than 150 Fresh & Easy stores out of the chain’s 2013 bankruptcy.
British grocer Tesco Plc launched Fresh & Easy in 2006 with many industry analysts expecting the deep-pocketed company to challenge the dominance of Wal-Mart Stores Inc . However, the poorly timed move centered on the U.S. Southwest just as the region’s overheated housing market was slumping.
Tesco provided Yucaipa with $120 million to help fund the acquisition.
Fresh & Easy’s website on Friday was topped with a banner proclaiming “Everything must go!” and “All Stores Closing!”
The El Segundo, California-based company said in papers filed in U.S. Bankruptcy Court in Wilmington, Delaware, that it had between $100 million and $500 million in liabilities, and less than $50 million in assets.
Yucaipa also owned a stake in the Northeast supermarket chain Great Atlantic & Pacific Tea Co Inc, better known as A&P, which filed for bankruptcy in July.
Fresh & Easy’s closure coincides with the recent bankruptcy of rival grocer Haggen Holdings, which fumbled an ambitious expansion into the U.S. Southwest.
Haggen agreed in January to acquire 146 supermarkets from the much-larger Albertsons chain, which was required to divest the stores to merge with Safeway. At the time, Haggen had only 18 stores in its Pacific Northwest stronghold.
Haggen is selling stores in southern California and Nevada with initial bids from Smart & Final and regional upscale supermarket chain Gelson’s.