Tesco Sells Fresh & Easy Stores

Tesco Plc (Cheshunt, U.K.) will sell about three-fourths of its Fresh & Easy stores in the U.S. to The Yucaipa Cos. (Los Angeles), marking the end of a failed six-year initiative.

Yucaipa will acquire more than 150 of Fresh & Easy’s near 200 stores in Nevada, California and Arizona, as well as distribution and production facilities. Tesco said those outlets not included in the transaction will be closed in the coming weeks.

Tesco built the Fresh & Easy from scratch in 2007, with a focus on budget prices, healthy food and private-brand items, eventually pouring in about $1.6 billion. It has become a drag on the company, which is struggling to maintain its dominant share of the British grocery market.

“The sale to Yucaipa represents the best outcome for Tesco shareholders and Fresh & Easy’s stakeholders,” said Tesco ceo Philip Clarke, reports Bloomberg. “It offers us an orderly and efficient exit from the U.S. market.”

Yucaipa said it expects to complete the purchase within three months. “In the meantime, it is business as usual for most Fresh & Easy stores.”