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Retail

Tesco Sells Fresh & Easy To Yucaipa

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Tesco Sells Fresh & Easy To Yucaipa

Tesco has announced the sale of its Fresh & Easy banner in the US to YFE Holdings Inc., an affiliate of Yucaipa Companies LLC.

Following a strategic review of its US operations earlier this year, Tesco will offload more than 150 stores as well as Fresh & Easy’s Riverside distribution and production facilities.

As part of the deal, Tesco will loan the new business around £80m, secured against the Riverside Campus facility.

More than 4,000 employees will also be transferred under the deal.

Those stores not included in the transaction will be closed over the coming weeks according to Tesco.

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The total cash outflow relating to the closure of these stores, other expenses and the loan is expected to be no more than £150m. The sale to Yucaipa, which is subject to the necessary legal and regulatory approvals, is expected to be complete within three months.

According to Tesco,'Following the completion of the full sale and disposal process, there will be no ongoing financial exposure for Tesco'.

Philip Clarke, CEO of Tesco, said,"The decision we are announcing today represents the best outcome for Tesco shareholders and Fresh & Easy's stakeholders. It offers us an orderly and efficient exit from the US market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy."

Fresh & Easy opened its first stores in November 2007 and has 200 neighbourhood markets in south-western states of California, Nevada and Arizona.

© 2013 - ESM: European Supermarket Magazine by Ellen Lunney

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