Этот пекарь работает с пяти утра, поэтому хлеб всегда свежий.

The ending -ь does not automatically mean a noun is feminine. Russian nouns ending in a soft sign can be either masculine or feminine.

Пекарь is masculine. You can tell here because it goes with этот, the masculine form of this.

So:

• этот пекарь = this baker
• not эта пекарь

Many masculine nouns for people also end in -ь, for example:

• учитель = teacher
• словарь = dictionary
• царь = tsar

Этот must agree with пекарь in:

• gender: masculine
• number: singular
• case: nominative

Here пекарь is the subject of the sentence, so it is in the nominative case. The matching form of этот is therefore этот.

Compare:

• этот пекарь = this baker
• эта булка = this bread roll
• это утро = this morning
• эти пекари = these bakers

Работает is the 3rd person singular present tense form of работать = to work.

It matches пекарь because the subject is:

• he / this baker
• singular

So:

• я работаю = I work
• ты работаешь = you work
• он / она работает = he/she works

In this sentence, the present tense expresses a habitual or regular action: the baker works from five in the morning, not just right now at this exact second.

Russian prepositions often have more than one meaning. С is a very common example.

It can mean:

• with: с другом = with a friend
• from/off: с полки = from the shelf
• since/from a time: с пяти утра = from five in the morning

In this sentence, с is used with a starting time, so it means from / since.

Because in the meaning from/since, the preposition с requires the genitive case.

The number пять changes in the genitive to пяти.

So:

• пять = five
• с пяти = from five

This is very common with time expressions:

• с двух часов = from two o’clock
• с трёх = from three
• с пяти утра = from five in the morning

Утра is the genitive singular form of утро.

In this phrase, the time expression is built in a way that uses the genitive:

• в пять утра = at five in the morning
• с пяти утра = from five in the morning
• до пяти утра = until five in the morning

So утра is the normal form in this kind of expression.

This is one of those very common time phrases that learners simply get used to as a pattern.

Yes, часов can be added, but it is often omitted in everyday Russian.

Both are possible:

• с пяти утра
• с пяти часов утра

The shorter version is very natural and common in speech.

Russian often leaves out час(ов) when the meaning is obvious:

• в три утра = at three in the morning
• к семи вечера = by seven in the evening
• с пяти утра = from five in the morning

Because the sentence contains two clauses:

1. Этот пекарь работает с пяти утра
2. поэтому хлеб всегда свежий

The second clause gives the result of the first one, and in Russian this is normally separated by a comma.

So the structure is basically:

• [cause], therefore [result]

That is why the comma is needed.

They are related, but they are used differently:

• поэтому = therefore / so / that is why
  It introduces the result.
• потому что = because
  It introduces the cause.

Your sentence says:

• This baker works from five in the morning, so the bread is always fresh.

You could rephrase it with потому что:

• Хлеб всегда свежий, потому что этот пекарь работает с пяти утра.
• The bread is always fresh because this baker works from five in the morning.

So the meaning is very close, but the direction of the sentence changes.

In Russian, the verb to be is usually omitted in the present tense.

So:

• хлеб свежий literally looks like bread fresh
• but it means the bread is fresh

This is normal Russian grammar.

Compare:

• Хлеб свежий. = The bread is fresh.
• Хлеб был свежий / свежим. = The bread was fresh.
• Хлеб будет свежий / свежим. = The bread will be fresh.

In the present tense, Russian usually does not say есть in this kind of sentence.

Here свежий is a predicate adjective in the nominative, agreeing with хлеб:

• хлеб = masculine singular
• свежий = masculine singular nominative

In simple present-tense statements with no visible to be, the nominative form is the normal choice:

• суп горячий = the soup is hot
• чай холодный = the tea is cold
• хлеб свежий = the bread is fresh

You may also see instrumental forms such as свежим in other constructions, especially with an expressed verb like был, стал, будет, depending on style and nuance:

• Хлеб был свежим.

But in this sentence, свежий is the straightforward, natural form.

Всегда means always, and here it naturally comes before the adjective:

• хлеб всегда свежий = the bread is always fresh

Russian word order is flexible, so some changes are possible:

• Этот пекарь с пяти утра работает, поэтому хлеб всегда свежий.
• С пяти утра этот пекарь работает, поэтому хлеб всегда свежий.

These are still understandable, but the original order is neutral and natural.

The sentence as given sounds like a normal, unmarked way to say it.