TESCO HEADS TO US AGAIN WITH F&F FASHION BRAND
Struggling supermarket returns to America, where it wrote off more
than £1bn on failed Fresh & Easy convenience stores a year ago
Tesco’s last American venture, Fresh & Easy, was a £1bn failure
Photo: Alamy
By Christopher Williams
5:57PM BST 14 Apr 2014
Tesco will attempt again to gain a foothold in the American retail
market, this time as a fashion brand owner, a year after it was forced
to abandon its loss-making Fresh & Easy chain of convenience stores
in California.
The struggling supermarket giant will team up Retail Group of America,
which runs American Accessorize and Monsoon franchises, to introduce
its F&F range of clothes to American shoppers.
The pair have agreed to open a chain of seven F&F stores on the
east coast this year, beginning in Boston next month. Locations
in shopping malls in New York, Philadelphia and Newport, Virginia,
are also planned.
F&F’s entry into the world’s largest retail market is the biggest test
yet of Tesco’s plan to establish the brand globally. Established in
2001 as an answer to Asda’s George range, last year Tesco announced
standalone F&F stores would open in the Middle East, Armenia,
Azerbaijan, Georgia and Kazakhstan. The brand now has franchises in
10 countries.
Tesco’s return to the United States was announced as the company
prepared to detail its problems on home turf at its annual results
on Wednesday. Analysts expect the challenge to Tesco’s core business
from budget supermarkets Aldi and Lidl to weigh heavily on group
profits and add to pressure on chief executive Phil Clarke.
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The international expansion of F&F is one of several diversification
tactics Tesco is using in an attempt to soften the blows to its
main business.
Mr Clarke will hope his fashion brand will enjoy more success in
the United States than Fresh & Easy, which Tesco backed for six
years before giving up on the attempt to convince Americans to buy
their groceries at smaller stores. It wrote off more than £1bn on
the failed venture and in September sold it to Yucaipa Companies,
the billionaire Ron Burkle’s private equity group.
Jason Tarry, chief executive of F&F, said: “We’ve had a really positive
response from customers in all of our overseas markets so we’re hoping
our American stores prove to be just as popular.”
Retail Group of America is owned by the Saudi conglomerate Fawaz
Al Hokair & Co, which also runs runs international franchises for
an array of brands including Costa Coffee and has is involved in a
joint venture with Burberry, among others.
From: Emil Lazarian | Ararat NewsPress
