Thursday, June 13, 2013

Latest Fresh & Easy rumor

Wild Oats Markets Inc., the closed purveyor of organic and natural foods, is planning a comeback this year, potentially aided by local billionaire Ron Burkle.

The company, which has been out of operation since 2007, now says on its website that it is "re-introducing" its brand, bringing beverages, snacks, cereals, pasta and other goods to store shelves.

Burkle's Los Angeles private equity company Yucaipa Cos. seems to be involved. A trademark application filed by Wild Oats Marketing last June and published for opposition in late May lists Yucaipa's Sunset Boulevard address.

The trademark could cover a brand offering retail and online grocery store services, with features such as home delivery, phone-in orders, convenience store items and gasoline, according to the document. The application also described catering and take-out food services.

Yucaipa did not respond to requests for comment.

Burkle is no stranger to supermarket deals.

The magnate was the largest shareholder of Wild Oats when the brand was sold for $565 million to rival Whole Foods Market Inc. in 2007. Earlier in his career, Burkle handled leveraged buyouts of grocery chains such as Food 4 Less, Ralphs and Fred Meyer.


Posted by Steve Sinai


Anonymous said...

Fingers crossed. I liked the old Wild Oats stores. Might be even more competition for Safeway. Delivery service seems to be catching on. I notice several of my older and/or busier neighbors using the delivery service. The seniors like it for heavy/bulky stuff they don't need to eyeball.

Anonymous said...

I have also heard the following rumors:

Grocery Outlet
Whole Foods
Nugget Markets

Anonymous said...

Pacifica does not have enough rich hippies to support a store like Wild Oats.

The rich hippies are in Marin. All the poor hippies live in Pacifica.

Anonymous said...

Not much of a rumor when there is nothing that even remotely suggests that Wild Oats might come to Pacifica. Alas, like so many other potential businesses, Pacifica is a place that is usually by=passed.

Anonymous said...

Is/was Wild Oats like New Leaf Market?

Anonymous said...

OK, I stand corrected. I just "read more," and there is talk that Wild Oats might take over some or all of the Fresh and Easy outlets. I guess that would include Pacifica.

Anonymous said...

The rumor that Safeway was going to sell Safeway Canada Operations started 5 years ago. Just took place.

Also the rumor that Kroger wanted to buy some or all of Safeway has been floating around for the last 5 years.

Anonymous said...

Also heard the rumor that Trader Joe's was going to buy all or part of Fresh & Easy.

Anonymous said...

Can you poor Pacifica hippies please take a cue from your Marin brethren?

Anonymous said...

Safeway reveals pension obligations, calls them 'manageable'

Safeway Inc., under recent scrutiny regarding its ability to take care of its pension obligations and the possibility of rising labor costs, released clearer details Tuesday of its costs, according to Dow Jones.

The company's shares dropped Monday after a Credit Suisse analyst downgraded his rating on the grocery chain, suggesting that Safeway's multi-employer pension plans represented a $7 billion pre-tax unfunded liability.

Safeway says that its unfunded liability is roughly $1.88 billion, pre-tax, and that recent moves such as contribution increases have helped reduce that number over the past few years.

The company also plans to further reduce the level of its unfunded liability through collective bargaining, and pushing for better market returns.

In the meantime, the company said its multi-employer pension plan contributions remain "a manageable issue."

Safeway's fourth-quarter earnings fell 6.1 percent, largely due to rising food costs; its share prices rose Tuesday.

Safeway operates 1,678 stores in the United States and Western Canada and had annual sales of $43.6 billion in 2011.

Kathy Meeh said...

New York Times, 6/12/13 article "Safeway to sell its operations in Canada" The Canadian retailer Sobeys said on Wednesday that it would pay $5.8 billion in cash for the Canadian operations of Safeway, a move that would make it a leading grocery chain in western Canada." The USA Safeway/Kroger rumor seems "unsubstantiated".

Consideration of Trader Joe's buying "all or part of Fresh & Easy" (southern California mentioned) is speculative, described in some articles as "a wish". Bloomberg, 6/12/13 indicates Ron Burkle, under the Wild Oats brand name, is currently in talks to Buy Tesco's Fresh & Easy.

Kathy Meeh said...

Anonymous 9:03 AM, periodically over several years, Safeway has had a weak balance sheet. With the sale of Safeway Canada, the following describes the business strategy, which stock market fluctuation seems to like. See USA Today 6/12/13 article.

"After taxes and expenses, Safeway said proceeds from the deal are expected to be 4 billion Canadian dollars. Safeway said proceeds will be used to pay down $2 billion in debt and to buy back stock. It also said some of the proceeds may be used to invest in "growth opportunities." The transaction is expected to close in the fourth quarter and is subject to regulatory approvals. Safeway shares rose $8.74, or 37.8%, to $31.85 in after-hours trading."

Anonymous said...

Consideration of Trader Joe's buying "all or part of Fresh & Easy" (southern California mentioned) is speculative, described in some articles as "a wish".


Isn't 90% of the stock market purchases based on "speculative."

Anonymous said...

This was sloppy reporting all the way around. This girl Tiffany, got this article idea from the website

If you looked at the Fresh & Easy business model they should have had about 400 stores open by now. They went all out in areas desimated by the Real Estate Bust. Phoenix, Las Vegas, Southern California and The Central Valley.

The idea was good and they wanted to put stores in the inter city. The BayView and the store in SF on Silver had no supermarket.

The timing for expansion was very bad.

From what I hear this guy Burkle, is pretty hands on, with all his purchases and he is not in on the dicussions. That leads me to believe that talks are not as advanced as this article tends lead to.

todd bray said...

Chris, are you in support of the widening to gain access for your MERF project next to the Lutheran church?

Chris Porter said...

That was sooooo long ago I forgot about it..What 15 years ago. Talk about grasping .......

Anonymous said...

I don't see this deal for Fresh & Easy unless Ron Burkle gets "paid" to take it over, similar to the deal that Tesco was forced to accept when they exited Japan.

Wild Oats was a fantastic store to shop in. Quality was par with Whole Foods. Price points was below Whole Foods but above Sprouts.

The problem is that the majority of the poorly located Fresh & Easys do not fit the demographics for Wild Oats.

Added to that is Tesco's operation of Fresh & Easy from the ground up is a profitless venture. There is nothing that is salvageable. Ron Burkle would be facing an entire "gut job" even if he was paid to take it over.

Fresh & Easy has 199 locations plus several stores and sites that were never opened. Of the 199 stores, there are 25 of them that are marginally profitable.

Most of the locations are not prime real estate for retail or have very poorly negotiated leases.

Maybe Burkle's genius sees something of worth that most in the industry do not. If anyone can make something of this, it's him.

Otherwise I believe Tesco will have to liquidate and sell piecemeal.