Wild Oats Markets, a national natural and organic foods retailer, today (14 November) announced plans to close all five of its Henry’s Farmers Market stores located in Arizona and three additional Wild Oats stores in other markets, in December 2006.
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Additionally, the company scuppered plant to open a Henry’s store under development in the Phoenix market, and will take an asset impairment charge in the fourth quarter for two underperforming Wild Oats stores in other markets, one of which will close when its lease expires in 2007.
Wild Oats said that after an extensive review of its store portfolio the company determined that these stores are not in optimal locations for sales growth.
All of the Henry’s Farmers Markets stores in and around the Phoenix area will be closed. The two Wild Oats stores in the Phoenix area will remain open, and the Wild Oats brand will be the company’s focus for future growth in the market.
Wild Oats stores in the following locations will also be closed on 16 December: Village Pointe Center, Omaha, Nebraska; Fort Collins, Colorado; and West Jordan, Utah.
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By GlobalDataThe savings realised from these closures will be re-invested in the company’s existing store base to drive higher sales performance through various marketing, merchandising and operational initiatives, Wild Oats said. The company expects to incur approximately US$25.5m in restructuring charges in the fourth quarter of 2006. Additionally, in the fourth quarter, the company expects to incur incremental operational costs of approximately US$1.7m related to the closures.
“With a sophisticated real estate model in place for our Wild Oats stores and a focus for Henry’s growth in Southern California, we intend to continue to invest to grow our brand and our business, including reinvestment in existing stores,” said Gregory Mays, chairman and CEO of Wild Oats. “We are building on a strong foundation, and our focus will be to grow sales in existing stores while using our improved real estate model to select high-potential sites for new stores, like those opened so far in 2006.”
“Henry’s is a very compelling chain that fills a unique niche in the Southern California specialty foods market,” said Mays. “We believe that the Phoenix stores were not performing at Henry’s typically strong levels because of the fiercely competitive nature of the Phoenix food retail market, and the fact that Henry’s was a new entrant to Phoenix two years ago. Therefore, we have very little brand awareness in a crowded market.”
