Tesco confirmed it is planning to sell Fresh & Easy but expects the process to take around three months.
In its annual report Wednesday, the British retail giant said that abandoning its U.S. venture, which has absorbed more than $1.53 billion of capital, will help with restructuring the company. Since it opened in the United States in 2007, Fresh & Easy has struggled to compete with other small markets, such as Trader Joe’s.
There are 199 Fresh & Easy stores throughout California, Arizona and Nevada, including 21 in the Las Vegas area. About 5,000 people are employed at the stores, or about 20 to 25 at each location.
Stephanie Patryla, spokeswoman for Fresh & Easy, said, “There are no plans to close any portion of the business.”
She said that while Tesco is selling the brand, there are “many” parties interested in purchasing the Fresh & Easy stores as an entire operating unit. No potential buyers’ names have been discussed .
“We’re just confident that we can remain our customers’ favorite neighborhood market. It’s business as usual at our stores,” Patryla said.
In his announcement Wednesday, Tesco CEO Philip Clarke said, “When I became CEO, I really did give it all that we had, but in the end I’m responsible to investors, and I know I can deliver more to them by leaving than I can by staying.”
Clarke put Fresh & Easy under review in December, saying an exit was likely. He became Tesco’s CEO in 2011 after Sir Terry Leahy retired.
Clarke said the December review was performed because Fresh & Easy “wasn’t going to deliver acceptable results to shareholders.”
He added that maybe eventually it could, but that “it’s just going to take too long.”
Chief Financial Officer Laurie McIlwee said Tesco had received “a lot of interest” in Fresh & Easy, both for the whole business and for parcels of stores. He said Tesco is most interested in buyers who want to purchase the complete business, noting that a clean sale would remove redundancy and lease issues.
“Clearly the process is still under way,” McIlwee said.
Tesco’s trouble isn’t limited to the U.S. The company cited disappointing results in its European markets, and it closed five underperforming stores in China. Tesco pulled out of Japan last year.
Contact reporter Laura Carroll at email@example.com or 702-380-4588. Follow @lscvegas on Twitter.