Grocery Chain Eyes Sale to Ron Burkle After Filing Bankruptcy
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Grocery Chain Eyes Sale to Ron Burkle After Filing Bankruptcy

October 5, 2013

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Fresh & Easy Neighborhood Market Inc., which is currently owned by British supermarket monolith Tesco, is filing for bankruptcy protection, according to a recent report from the Los Angeles Times.

The chain of grocery stores is reportedly planning to engineer a sale to Yucaipa Cos., a company owned by Los Angeles Ron Burkle, sources report.

In its bankruptcy filing paperwork, the grocery chain claimed to owe upwards of $1 billion in debt, and a recent press release announced that the filing was "simply the next step in the restructuring process," according to reports.

In addition, the grocery store, which is wary of losing sales during the bankruptcy process, told its customers that the filing will have "no impact" on their shopping experience and that business will proceed "as usual."

And if prior corporate bankruptcies are any indication, this claim is likely true. The filing represents a big shift in the American grocery store market, particularly in the western part of the country, as Fresh & Easy reportedly runs more than 150 stores in California, Nevada, and Arizona.

The company also employees more than 4,000 people, sources say. Despite its large presence in the growing American West, the company started closing down stores recently after experiencing its sixth consecutive unprofitable year, sources report.

The company has had financial troubles since its launch a few years ago, as the grocery market on the West Coast remains one of the most competitive in the United States.

In addition, the prolonged economic slump led many consumers to cut down on their food purchases, which created pain for many grocery chains that didn’t offer heavily discounted items.

But Fresh & Easy could soon have a new life. Sources believe that Burkle plans to use the space in current stores to reopen Wild Oats Markets Inc., another grocery chain owned by Burkle that has been dormant since 2007.

Sources say Wild Oats Marketing has already filed its trademark application using an address belonging to Burkle’s biggest company. And Burkle will be able to make the first bid on the bankruptcy chain of grocery stores when it is up for auction this November, sources indicate.


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