CORRECTION: Whole Foods Market Says It’s Buying Wild Oats Markets
By Jonathan Brinckman, The Oregonian, Portland, Ore.
Feb. 22–The story slugged PO-WHOLE-FOODS, moved by McClatchy-Tribune Business News for Feb. 22, gave an inaccurate count of Wild Oats Market stores in Oregon.
Wild Oats Markets has six stores in Oregon and one in Southwest Washington.
Please delete or kill the previous version and use the corrected one below.
Whole Foods Market says it’s buying Wild Oats Markets
By Jonathan Brinckman
The Oregonian, Portland, Ore.
Feb. 22–Whole Foods Market Inc., the Austin, Texas-based natural foods grocery giant with two stores in the Portland area, announced Wednesday that it is spending about $565 million to acquire Boulder, Colo.-based Wild Oats Markets.
Wild Oats Markets, with six locations in Oregon and one in Southwest Washington, owns what were once the Nature’s Fresh Northwest food stores. Natures started from a single Southwest Portland store that opened in 1969.
Whole Foods intends to operate the Wild Oats stores under the Whole Foods name following a makeover of the stores, said Kate Lowery, a Whole Foods spokesperson in Austin. “Over time, we’ll look at each and every store and fold them into the Whole Foods brand,” she said.
The news shocked some in the natural foods industry. Seth Tibbott, president of Turtle Island Foods Inc. in Hood River, said he had heard that Wild Oats was looking for a buyer but had no idea that Whole Foods was in the market. Turtle Island Foods, which employees 50, is best known for making a vegetarian turkey substitute called Tofurky.
“This is a bombshell,” he said. “It’s a huge change for the industry that we’re still trying to make heads or tails of.”
Lisa Sedlar, president of New Seasons Market, a locally owned natural and conventional grocery chain with eight stores in the region, said she didn’t anticipate an impact to her company.
“We’re different than they are,” she said. “We sell natural and organic foods, but we also sell everyday groceries like Frosted Flakes and Coca-Cola.”
The purchase is a testament to the success of Whole Foods, a 191-store chain with 2006 sales of $5.6 billion and locations in the United States, Canada and the United Kingdom. Whole Foods, which started in 1980 with an Austin store of 19 people, now has more than 39,000 employees.
It opened its first Portland-area store — in Northwest Portland’s Pearl District — in February 2002, and its second — in Tigard near Bridgeport Village — late last year.
“They have a model that seems to work wherever they put it,” Tibbott said.
Wild Oats Markets had $1.2 billion in annual sales last year and operates 110 natural foods stores in the United States and British Columbia. It operates Wild Oats Marketplace, Henry’s Farmers Market, Sun Harvest and Capers Community Markets.
The deal calls for Whole Foods Market to acquire Wild Oats Markets’ common stock for $18.50 a share, or approximately $565 million. Whole Foods also will assume Wild Oats Markets’ existing debt of $106 million.
The stores are smaller than most Whole Foods locations, with about half the sales per square foot. Whole Foods executives said they believe they can lift sales per square foot close to the level of their own stores.
Wild Oats and Whole Foods operate side by side near Bridgeport Village, but a Whole Foods spokeswoman said her company has not decided the future of specific locations. A statement released by the two companies, however, said “store closures are expected as well as the relocation of some stores that overlap with stores Whole Foods Market currently has in development.”
The statement said that Whole Foods expects to make significant investments in remodeling stores before eventually rebranding them as Whole Foods Market stores.
Shares of Wild Oats jumped 17 percent in extended trading after the deal was announced Wednesday.
Whole Foods shares fell 37 cents, to $45.70, in regular Nasdaq trading but gained $2.39, or 5.2 percent, in extended trading. News of the sale apparently trumped Whole Foods’ announcement, also after stock markets closed, that its profit declined in the quarter ended Jan. 14.
Whole Foods expects to close the transaction by April.
The Associated Press contributed to this report.
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