Tesco exits US


tesco Fresh easyBritain’s biggest retailer, supermarket group Tesco, says it has struck a deal to sell the bulk of its loss-making US operations to investment group Yucaipa.

Tesco, which in April announced plans to offload Fresh & Easy, said US company Yucaipa would acquire more than 150 stores as well as distribution and production facilities. Tesco said it would shut the remaining 50 stores.

More than 4000 out of 5000 staff will transfer to the new business, which Tesco will loan about STG80 million ($A136.93 million), the British group said in a statement.

The cost of shutting stores, the loan and other expenses will come to a total of up to STG150 million, Tesco added.

“The sale to Yucaipa, which is subject to the necessary legal and regulatory approvals, is expected to complete within three months,” Tesco said in the statement.

Tesco chief executive Philip Clarke added: “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,” he said in the statement.

Fresh & Easy, which opened in late 2007, operates out of 200 stores across California, Nevada and Arizona. It employs more than 5000 people, including 1,300 at its distribution and manufacturing facilities in Riverside, Tesco said on Tuesday.

Tesco had in April reported a STG1.2-billion hit from Fresh & Easy, sparking the first drop in the British supermarket’s annual profits for almost two decades.


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