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Morrisons Buys Stake in FreshDirect

NEW YORK — British supermarket retailer Wm Morrison Supermarkets PLC has acquired a 10% stake in online grocer FreshDirect, based here, for about $50 million, Morrisons said Thursday.

In addition, FreshDirect said Rick Braddock has left the company as chief executive officer. Its board of directors has named Jim Manzi, a board member, to assume the responsibilities of chairman, and Jason Ackerman, FreshDirect founder and chief financial officer, to take on additional operational responsibilities as interim chief operating officer while the search for a full-time CEO is conducted.

Morrisons said the investment "will play a key role in the development of Morrisons online food business in the U.K."

FreshDirect currently delivers to customers in New York City and parts of New Jersey, Connecticut, and Westchester County and Nassau County in New York state.

Under the terms of the agreement, Dalton Philips, Morrisons's chief executive officer, will join the board of FreshDirect. In addition, Morrisons said it will place a team of workers in FreshDirect's headquarters facility in the Long Island City community in Queens "to learn about its profitable e-commerce model."

"I have seen retailers all over the world. Few have inspired me as much as the team at FreshDirect, a highly successful and profitable food retailer with a track record of terrific customer service.," said Philips in a prepared statement.

"What we learn from FreshDirect will be invaluable as we plan our own profitable e-commerce business for the U.K." "We are excited for our new relationship with Morrisons," said Jason Ackerman, FreshDirect founder and chief financial officer. "It's wonderful to have a retail partner who shares our deep passion for great customer service and quality fresh food. "This investment is a strong endorsement of our unique business model from a major player in the supermarket industry. This new partnership and capital strengthens our ability to support our strong growth and continued expansion."

Morrissons said investment will be used by FreshDirect to fund expansion and "support resources for existing customers."