Tesco Considering Fresh & Easy Exit

By Eric Anderson

Tesco is reported to have held talks with Aldi and Trader Joes about selling Fresh & Easy in the wake of financial crisis, however a breakup of the business is considered the most likely option, according to The Telegraph.
The world’s third largest retailer opened Fresh & Easy in 2007 and has invested more than $1.5 billion into the California-based chain. Upon leaving the US business, the company faces a loss of hundreds of millions of dollars.
Philip Clarke, CEO of Tesco, effectively put the business up for sale in December when he initiated a strategic review of Fresh & Easy and hired Greenhill to advise the company.
Tesco’s options for ditching Fresh & Easy include selling to a rival, selling off a stake in the business, or closing the business and disposing the assets piecemeal. The company has already began to sell Fresh & Easy refrigeration unit. Its 220 East Coast stores and distribution center could be attractive to property developers.
A spokesman for Tesco said: “We don’t comment on speculation. We’re carrying out a strategic review, as announced in December, and will update in April.”
Tesco’s arrival in the US was the most ambitious part of Sir Terry Leahy’s international expansion drive while chief executive. In his book, Management in 10 Words, Sir Terry said he would accept responsibility if Fresh & Easy failed.
“If they [the critics of Fresh & Easy] are proved right, it will have been my responsibility as CEO and a clear example that goals are easy to set, incredibly difficult to achieve and must carry a clear accountability,” he wrote.
Tesco Report