LA Times estimates Tesco lost upward of $2 billion in Fresh & Easy venture
LOS ANGELES — A report published Thursday in the Los Angeles Times estimated that U.K.-based Tesco has lost up to $2 billion in its failed Fresh & Easy California venture. Tesco had placed the troubled grocer on the sales bloc in December following the departure of Fresh & Easy CEO Tim Mason.
The retailer's struggles can be traced to labor unions and an ambitious investment into an 850,000-sq.-ft. distribution center that placed pressure on the 200-store chain to expand rapidly, according to the LA Times report.
Tesco has tasked investment bank Greenhill with conducting a strategic review of Fresh & Easy options that should be ready by April, according to reports.
Earlier this year, Bloomberg reported on a social-media driven campaign to keep Fresh & Easy locations open. However, according to the LA Times, Fresh & Easy recent emailed customers that the grocer doesn't know "if Tesco will continue to own the company."
Lease holders of Fresh & Easy locations are already looking for an out. Regency Centers Management, which owns, operates and develops primarily grocery-anchored retail centers, has been on the lookout for replacement tenants since January. "Fresh & Easy, we assume they're gone," Brian Smith, Regency president, chief operating officer and director told analysts during a quarterly conference call. "We're actively in discussions with people, with replacement tenants for those spaces. Unfortunately, we've only got two operating and they're both in Northern California and they should be — there's a lot of demand for those spaces."