April 14, 2014 / 1:56 PM / in 4 years

Britain's Tesco returns to U.S. with F&F clothing brand

LONDON, April 14 (Reuters) - Britain’s biggest retailer Tesco is to return to the United States with its F&F clothing business only seven months after offloading its loss-making U.S. supermarkets operation Fresh & Easy.

Tesco, the world’s third-largest retailer, said it would open seven stores on the east coast this year with its U.S. franchise partner Retail Group of America.

Starting near Boston in May it will then open four stores in New York and others in Philadelphia and Newport, Virginia, competing against value-priced clothing retailers such as Target , J.C. Penney and Gap Inc’s Old Navy.

F&F has expanded quikly since its launch in the UK and Ireland in 2001 and now operates in 21 countries.

Tesco, which is struggling to improve its British business despite billions of pounds of investment, handed Fresh & Easy to billionaire Ron Burkle’s Yucaipa investment company in September, marking the end of a six-year attempt to crack the U.S. market.

It had said in April last year that it would sell or close Fresh & Easy, booking restructuring and other one-off costs of 1 billion pounds.

The company is expected to report a 6 percent fall in annual profit on Wednesday. That would be its second decline in as many years, increasing the pressure on boss Phil Clarke. (Reporting by Neil Maidment; Editing by David Goodman)

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