Tesco’s US problems have ‘no financial impact’ on Copestick Murray
One UK wine importer with strong ties to Tesco’s US arm Fresh & Easy has moved to reassure its customers that its UK business is unaffected by the supermarket’s difficulties stateside.
Copestick Murray operates a separate US company called Cornerstone, and founders Robin Copestick and Paul Murray are the major shareholders in each, although neither firm is financially dependent on the other.
Copestick, joint director, told Harpers that although Cornerstone does 95% of its business with Fresh & Easy, he was confident that it could find other outlets and distribution channels for its wine there.
“It’s not the best news we’ve ever had, but we’ll stay in the US and make it work,” he told Harpers. He added that since Cornerstone and Copestick Murray were two separate companies, the US firm’s performance was “totally irrelevant” and would have “no financial impact” on its UK operation.
In recent times Tesco shareholders have been getting impatient over losses in the US and putting pressure on the board to pull out of the US market, despite Tesco’s £1 billion investment there being relatively small when compared to the group’s overall balance sheet. The group operates around 200 stores in the USA, but last week chief executive Philip Clarke announced a review of the American operation, admitting Tesco was most likely to “exit” the business.
Tim Mason, who until last week headed Tesco’s US operation, resigned from the firm after 30 years of service as the strategic review was announced. He was also Tesco’s deputy chief executive and many considered him a potential successor to Sir Terry Leahy before Clarke took on the role.
Copestick, along with a number of other UK suppliers in different categories, initially invested in Fresh & Easy in order to set up a company that would be compatible with its US operation. Copestick Murray is hopeful that a buyer will be found and its can continue as distributor, as the grocer is currently holding around $3 million of its stock. “The worst case scenario would be if a buyer can’t be found and Tesco decided to close.” Currently Tesco is considering options including selling off the whole estate, including the distribution centre, or selling off the operation piecemeal.
Copestick said: “It’s a massive wine market and an amazing opportunity.” The firm employs seven staff in the USA, including the recently-appointed wine director Lucy Clements who moved across from Sainsbury’s in the UK. She will continue to work as wine director across both companies. Copestick has travelled to Los Angeles this week to meet with senior management of Fresh & Easy to discuss the options available and also to meet with new customers.
Meanwhile, other UK suppliers were airing their views on social networks, with Catherine Monahan of Clink! Wines saying on Facebook: “Fresh & Easy never worked for a long time... HOWEVER I will say their wine range was brilliant, labels very exciting and “engaging” and a pity it never took off. Not in the right areas and the stores seemed disingenuous to a degree vs. Publix and Trader Joes and Target.”
Fresh & Easy’s private label range was designed mainly by the Copestick Murray team and Stranger & Stranger.