Is Fresh & Easy Going to File for Its Second Chapter 11 Bankruptcy?
EL SEGUNDO, CA - New reports have surfaced claiming that Fresh & Easy may be preparing to file its second Chapter 11 bankruptcy in two years.
“People familiar with the situation” have told Bloomberg that the former Tesco-owned chain that an application for the bankruptcy could come as soon as next week, but the company could potentially find a buyer for all or many of its locations instead.
Following its 2013 bankruptcy filing, Fresh & Easy’s assets were bought by an affiliate of billionaire investor Ron Burkle, Yucaipa Cos. According to Bloomberg, the chain filed for bankruptcy after suffering from "poorly located stores and intense competition" in its Southern California home market. The recession was also noted by the company as a cause of the falling profits.
Representatives for Fresh & Easy and Yucaipa didn’t respond to Bloomberg's requests for comment, the publication says, but this filing could potentially mirror those of companies like A&P and Haggen. A&P had reportedly been once owned by Burkle's Yucaipa as well.
Fresh & Easy was originally a part of grocery giant Tesco, who began the chain in 2007. After opening about 200 stores in the Southwestern U.S with the goal of targeting busy urban dwellers, it became clear that competition from stores like Trader Joe’s would cause difficulty for the company.
Tesco invested nearly $1.6 billion in the company before deciding to sell.
