By Renee Schiavone and Guy McCarthy
The investment firm Yucaipa Companies, founded by Southern California billionaire Ronald Burkle, announced Tuesday that it will take over the Fresh & Easy grocer chain's U.S. holdings from its U.K. owner.
Yucaipa Companies will complete the purchase within the next three months, according to a statement issued Tuesday on behalf of the company. In the meantime, business will carry on "as usual" at the grocery stores while some 4,000 employees are transitioned with the assets to the new owner.
Some of those employees work at the Lake Forest store, located at the corner of El Toro and Trabuco.
United Kingdom-based Tesco announced months ago it would be unloading
its U.S. assets, which include nearly 200 stories in California, Arizona
and Nevada. The Assoicated Press reports that approximately 50 of the stores will be closed in the coming weeks.
Though the details of the Yucaipa acquisition weren't released by the companies, Reuters reports the other 150 stories will be transferred to the American investment firm in the deal, along with its Riverside distribution hub.
The news agency also reports that Tesco will lend the company approximately $126 million to take the debt-ridden company off their hands, secured against the Riverside facility. The company has never posted profits since it entered the U.S. market.
“The decision we are announcing today represents the best outcome for Tesco shareholders and Fresh & Easy’s stakeholders," Philip Clarke, CEO of Tesco, said in a press statement. "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.”
Burkle said Tesco gave the business' new brand a "tremendous foundation" that provides a "solid starting point to complete [their] vision with some changes that we think will make it even more relevant to today's consumer."
Though changes may be on the way, Burkle added the supermarket chain isn't going anywhere.
"We plan on continuing to build Fresh & Easy into a 'next-generation convenience retail experience,' providing busy consumers with more local and healthy access for their daily needs," he said.
Grocery magnate Burkle has developed a reputation for not only his extreme wealth and investments, but the company he keeps. Known to be close friends with Bill and Hillary Clinton, along with Al Gore, the businessman came from humble beginnings, as the son of a grocer and started out in the industry working as a box boy at age 13, according to a Forbes profile.
According to Forbes, the 60-year-old Burkle is now the 437th richest person in the world and worth $3.1 billion dollars. In the United States, he's the 144th richest person.
Burkle was born in 1952 in Pomona, where he stocked shelves in the Stater Bros. store his dad managed, according to a 2006 Forbes article headlined 'The Rise Of Ron Burkle.' In 1986 he formed Yucaipa Cos., naming it after the town where he was living at the time, and began buying and selling small grocery store chains, according to Forbes.
Fresh & Easy targeted California and the Southwest when it entered the U.S. market in 2007. Tesco is the No. 3 retailer worldwide in terms of sales, behind Wal-Mart Stores Inc. and Carrefour SA.