Struggling Torrance-based grocery store chain Fresh & Easy announced Wednesday it will liquidate inventories in its remaining 97 stores in California, Arizona and Nevada, abandoning an ambitious foray into an intensely competitive market that never caught on with consumers.
The company, which had already cut in half the number of stores it had at its peak, said all 3,000 of its employees will be laid off.
Fresh & Easy’s 110 workers at its Hamilton Avenue headquarters will be released gradually within the next four weeks, said a worker there who requested anonymity. The company closed its El Segundo headquarters earlier this year and consolidated administrative operations in Torrance to save money.
“Over the last two years, we have been working hard to build a new Fresh & Easy,” the company said in a statement. “While we made progress on stemming our losses and moving the business closer to break even, unfortunately, we have been unable to obtain financing and the liquidity necessary to fund the business going forward.”
Workers were told Tuesday at a hastily called meetings that Fresh & Easy was continuing to try to sell all or part of the company, but if that was unsuccessful, it would “wind down” the business.
The first layoffs are expected to occur a week from Friday, employees were told at a meeting at the company’s home office.
Fresh & Easy made a big splash in 2007, backed by the financial muscle and expertise of British supermarket chain Tesco, which saw an opportunity to enter the U.S. market.
Its smaller store format of about 10,000 square feet was aimed at time-pressed consumers who could quickly grab fresh food for dinner on the way home and use self-service checkouts.
But the recession hit soon after, prompting the company to lose millions of dollars and close some underperforming stores.
The company filed for bankruptcy protection in 2013 and was purchased by Los Angeles-based billionaire Ron Burkle, co-founder and managing partner of Yucaipa Cos., which specializes in turning around underperforming companies.
Burkle sought to reposition Fresh & Easy in the marketplace but was largely unsuccessful.
Fresh & Easy closed about 50 of its stores in March in the three states where it operates, trimming its number of outlets by about a third.
The demise of Fresh & Easy marks the second grocery store chain casualty in the past few weeks.
Bellingham, Wash-based Haggen announced earlier this month it was bailing out of the Southern California market it had entered only about a year ago when it purchased dozens of Albertsons and Vons supermarkets in an ill-conceived expansion plan that almost sunk the company.
While Fresh & Easy had its fans, most stores appeared to have little foot traffic and the chain was attempting to reduce the amount of packaging it used in response to customer concerns.
Indeed, the few customers venturing into the Fresh & Easy outlet on Hawthorne Boulevard in Torrance on Wednesday didn’t appear surprised by the news, especially given the bare shelves inside.
Long Beach resident Tracie Bell, whose office is next door, said she liked shopping there in part because it was uncrowded.
“They’re friendly, it’s small, convenient, more personal,” she said. “There’s a store by my house in Long Beach and they’re friendly there, too.”
Literal signs that the chain was cutting back on inventory in preparation for possible closure appeared in stores in recent days, with one declaring “Where’s the beef?” because store shelves had not been restocked.
Another attempted a similarly lighthearted tone to provide more information to customers:
“In honor of Vegetarian Awareness Month we’ve reduced our meat and poultry inventory,” it read. “Just kidding!
“We’re experiencing supply issues and thank you for your understanding,” it added. “We’re working quickly to get things back up, so in the meantime check out our frozen meat items or our fabulous fresh and frozen fish products!”
Bloomberg Business reported last week that Fresh & Easy was on the brink of filing for bankruptcy a second time, but that is not expected to occur.
Other grocery chains, including discount retailers Aldi and Grocery Outlet, are poised to enter the potentially lucrative Southern California market to fill the void left by the departures of Haggen and Fresh & Easy but will need to differentiate themselves from the competition to succeed, Illinois-based retail consultant Craig Rosenblum recently told the Los Angeles News Group.
“Those on the coast or in areas where there’s not a robust traditional grocery (demand) do better with a high-end, specialty format,” he said.
Source: Daily Breeze