Fresh & Easy has hired former 7-Eleven CEO Jim Keyes, who is expected to run the grocery chain once its sale by Tesco is complete, Supermarket News reported on Thursday (Sept. 19).
But Keyes will be in charge of a slimmed down, 150-store chain: 50 unprofitable stores will be shuttered by the end of this week. About 400 managers and employees at those stores learned last week through conference calls that they had lost their jobs, according to Fresh & Easy spokesman Brendan Wonnacott, who confirmed that all full- and part-time employees are eligible for severence pay, six months of health coverage and other unemployment services, according to the San Jose Mercury News.
Keyes and Fresh & Easy CEO Tim Ashdown met with Fresh & Easy employees at the company's remaining stores and distribution center this week to discuss plans for the company once Ron Burkle's Yucaipa takes over. That's expected to happen within the next few weeks. Exactly how much Tesco will get from Yucaipa for the chain is still unclear, because the deal involves store closings, loans and other financial complications.
Also still unconfirmed is whether the chain will be renamed. Keyes owns the Wild Oats Markets trademark, which he acquired after the former 110-store natural foods chain was acquired by Whole Foods (NASDAQ:WFM). Speculation has been that the Fresh & Easy stores will be rebranded as Wild Oats Markets after the sale, but neither Keyes or Yucaipa has done more than hint that's the case.
Tesco agreed to sell Fresh & Easy after investing more than $1.5 billion to build the chain from scratch starting in 2007. But the chain has never been profitable, in part because some stores were in poor locations and because the business model was one Tesco had never used before.
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