Fresh Produce Sheds 12 Ailing Stores

6/1/2015
Fresh Produce Holdings, LLC's sale of its assets to a new company, Blue Stripe, LLC dba Fresh Produce, was approved recently by the U.S. Bankruptcy Court in the District of Colorado. Fresh Produce had previously filed for Chapter 11 protection on April 4, 2015. Blue Stripe LLC, an investment group that includes the original founders of Fresh Produce and a group of passionate brand enthusiasts, officially took ownership of Fresh Produce at midnight on May 15, 2015.

The brand will continue to sell products through wholesale accounts and online. In addition, the retail operations of company-owned stores will continue in Tucson, Ariz.; La Jolla and Palm Desert, Calif.; Boulder, Colo.; Boca Grande, Delray Beach, Estero, Fort Lauderdale, Key West, Orlando, Sanibel Island, Sarasota, and St. Augustine, Fla.; and Charleston and Myrtle Beach (Outlet), S.C.

"On behalf of all of us here at Fresh Produce, I want to say 'thank you' to our employees, our customers, our wholesale accounts, and our vendors for their patience and support over the last few months," said founder Mary Ellen Vernon. "We are very pleased to have been able to orchestrate a transaction for the company that will allow Fresh Produce to continue operations and to carry on our promise to add color to the lives of women everywhere."

As part of the court-approved asset sale, Tiger Capital Group acquired the assets of 12 financially underperforming Fresh Produce stores that it will liquidate over the next 60 days. The store closing sales will be held in Foley, Ala.; Scottsdale, Ariz.; Anaheim and Pasadena, Calif.; Destin, Naples, West Palm Beach, and Lady Lake, Fla.; Buford, Marietta and St. Simons Island, Ga.; and a second location in Myrtle Beach, S.C.

"In today's bifurcated real estate environment, private equity firms and other retail investment groups often find themselves in a bind — they have well-located, profitable stores in some markets, but under-performing assets in others," noted Bob DeAngelis, Tiger Capital Group executive managing director. "Continuing to operate well-positioned assets requires capital and other resources. So, too, does shedding those underperforming stores, simply because of the need to effectively market and manage those liquidations to maximize returns."

Thus, when firms like Tiger acquire underperforming retail assets for strategic monetization, they effectively make key capital contributions to the overall restructuring plan. "You free up the capital needed to continue the business as a going concern," DeAngelis explained. "In this case, the equity provided by Tiger enabled a passionate, committed investment team to acquire Fresh Produce's best assets and position them for the future."
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