On January 31, 2013, Fresh & Easy parent company Tesco said it was looking at "strategic options" for its money-losing U.S. based Fresh & Easy Neighborhood Market stores.
We all pretty much knew where that was going...when you have a business segment that is losing $250 million a year, there was little doubt that Tesco would be leaving the U.S. market.
But that does not mean...yet, at least...that Tesco is shutting down Fresh & Easy. In a posting on the Fresh & Easy website today, the store indicated "As many of you have heard or read today, our parent company Tesco updated on the future of Fresh & Easy. While we don’t yet know who our new owner will ultimately be, Tesco has already received interest from a number of parties including groups looking to purchase Fresh & Easy as an operating business. We appreciate all the support and love we’ve received from our loyal customers and even though our parent company plans to leave the US, we’re pleased to confirm there are no plans to close any portion of Fresh & Easy."
So what Tesco and Fresh & Easy indicated today is that 1) Tesco is indeed exiting the U.S. market; 2) there are a number of potentially interest parties who may acquire the Fresh & Easy chain; and 3) there are no current plans to "close any portion of Fresh & Easy."
As part of today's announcement, Tesco said it is treating Fresh & Easy as a "discontinued operation" and as such, has written down the value of Fresh & Easy assets and future anticipated liabilities on its books...to the tune of £1.2 billion...which is approximately $1.8 billion in U.S. dollars. OUCH. The $1.8 billion loss includes roughly $257 million in operating losses, with the remainder the write-down in assets and estimate future lease costs.
That's gotta hurt a bit. Tesco is a British company but its stock also trades on Nasdaq under symbol TESO, which was down 3.3% today, over double what the S&P 500 was down today.
In any case, best of luck to the Fresh & Easy chain in finding a buyer and figuring out a way to generate a profit. There are 10 Fresh & Easy stores in Ventura County and directly adjacent areas.
Lastly, I heard what I found to be quite an odd Fresh & Easy commercial on the radio this morning that is posted below. Very unusual, kind of surprising use of the shortened "f&easy" - a bit risque if ya ask me :)