Tesco, the British supermarket chain, completed its retreat from the United States on Tuesday after selling most of its Fresh & Easy convenience stores to an affiliate of the money-management firm run by the billionaire Ronald W. Burkle.
The affiliate of the Yucaipa Companies agreed to acquire more than 150 stores as well as Fresh & Easy’s distribution and production operations in Riverside, Calif. More than 4,000 employees will also transfer to the new business, Tesco said in a statement. As part of the deal, Tesco will lend the new business $126 million.
Full terms of the transaction were not disclosed. It is expected to be completed within three months.
Fresh & Easy operates 200 neighborhood markets in California, Nevada and Arizona. Those stores not included in the transaction will be closed in the coming weeks, the company said.
“The decision we are announcing today represents the best outcome for Tesco shareholders and Fresh & Easy’s stakeholders,†Philip Clarke, the chief executive of Tesco, said in a statement. “It offers us an orderly and efficient exit from the U.S. market while protecting the jobs of more than 4,000 colleagues at Fresh & Easy.â€
Tesco initially hoped it had discovered a market niche for smaller stores offering warm meals along the West Coast and set up Fresh & Easy stores starting in 2007. But it soon became clear that the stores failed to compete with larger supermarkets as the economic slump crimped consumer spending. Attempts to turn the business around by changing store interiors, the product range and marketing also failed.
Tesco said last December that it would most likely withdraw from the United States and disclosed in April that the move would cost it £1.2 billion, or $1.8 billion.
