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Fresh & Easy Eyes Bankruptcy to Exit Leases: Sources

LOS ANGELES — Fresh & Easy Neighborhood Market here has reportedly been negotiating with landlords to reach settlements with as many as possible prior to filing for bankruptcy protection this coming week, possibly as early as Monday, real-estate sources told SN.

Representatives of Fresh & Easy could not be reached for comment.


Follow @SN_News for updates throughout the day.

The chain, the U.S.-based division of Tesco, Cheshunt, England, announced earlier this month it intends to sell most of its 200 stores in California, Arizona and Nevada to Yucaipa Cos., the locally based investment firm.

Real-estate sources told SN Fresh & Easy has reportedly hired executives from the San Francisco office of Alvarez & Marsal — a New York-based global financial specialist —  to work out deals with several Fresh & Easy's landlords. According to A&M's website, its Real Estate Advisory Services division "designs and implements value-enhancing real estate solutions."  

A&M representatives could not be reached for comment.

Read more: Fresh & Easy to Shut Unsold Stores

The sources said Fresh & Easy is offering to pay up to six months of rent on leases that are scheduled to run between eight and 18 years.  

"That's an extraordinarily short amount of time to pay for," one industry consultant said. "It's really a huge travesty for a company like Tesco, which told these people when it started opening stores how much money it had."

While Fresh & Easy is offering settlements to some landlords, the observer said it intends to walk away from others by filing for bankruptcy protection and avoiding further lease payments.

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