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EL SEGUNDO, Calif. — Fresh & Easy LLC is going out of business.
Fresh & Easy LLC is going out of business.
The chain filed for chapter 11 bankruptcy protection for the second time on October 30, and then announced this month that it would close all its remaining stores. Following the announcement, visitors to the chain’s website were greeted by a banner proclaiming: "Everything Must Go! All Stores Closing!"
In papers filed with the U.S. Bankruptcy Court in Wilmington, Del., the company has between $10 million and $50 million in assets and between $100 million and $500 million in liabilities. The company also named Amir Agam of FTI Consulting Inc. as its chief restructuring officer.
The liquidation of the chain will close the book on an ambitious, but unsuccessful, effort to change the way shoppers in the United States buy groceries.
British retailer Tesco PLC launched Fresh & Easy in November 2007 with the opening of six stores in the greater Los Angeles area. Billed as "a modern grocery store for the modern American," Fresh & Easy’s stores encompass about 10,000 square feet and carry about 3,500 SKUs. The format prompted comparisons with Trader Joe’s outlets, although the Fresh & Easy outlets devoted more space to fresh products and heat-and-eat ready meals.
Some analysts had high expectations for the concept, with one predicting that Fresh & Easy could be the 10th-largest U.S. retailer by 2015 with annual sales of $10 billion.
But the chain, which at one point operated 200 stores in California, Nevada and Arizona, had trouble gaining traction with consumers. Although it promised healthy food at affordable prices, some consumers complained that its prices were higher than those at conventional supermarkets. Out-of-stocks were also a problem, and other complaints ranged from the way produce was packaged to the fact that store offerings were not tailored to their communities.
Instead of providing Tesco with a way to conquer a huge new market, Fresh & Easy became a distraction and a drain on profits. Tesco lost about $2 billion over five years on the operation.
In 2013, Fresh & Easy filed for Chapter 11 bankruptcy protection. The chain closed about 50 stores and was acquired by Ron Burkle’s Yucaipa Cos., with Tesco providing about $120 million in financing and retaining a stake in the chain.
The new Fresh & Easy relaunched in 2014 with a new mission, described as creating a "smarter market" that saves customers time by making fresh and natural food more available and affordable. The new stores also featured sections dedicated to homeopathic and natural remedies, natural baby products and a wide selection of craft beers.
Then in December 2014 Fresh & Easy tried a new approach, remodeling stores in the Las Vegas market to function more like convenience stores.
The remodeled stores featured fewer aisles and more space devoted to prepared food stations, including a hot food bar with soups, a fire-oven pizza station, a coffee bar, made-to-order sandwiches and a self-serve bar for draft sodas. Other beverage options included smoothies; fresh-pressed orange juice; and kombucha, a fermented drink of sweetened black or green tea often presented as a functional food. The retailer said it intended to use the Las Vegas market to test other ideas.
Some of those concepts may have been paying off, but in the end they came too late.
A spokesman for the company said the Fresh & Easy has made progress over the past two years and was moving closer to breaking even, but ultimately lacked the liquidity and financial resources to stay in business.
