Whole Foods Market Inc. and Gaiam, Inc. announced today they have merged their Internet properties into a newly formed company named Gaiam.com, Inc. Following the merger, Gaiam will own 50.1% of Gaiam.com, Inc. and Amrion, Inc., formerly WholePeople.com, an 80% owned subsidiary of Whole Foods Market will own the remaining 49.9%.
Gaiam will continue to consolidate Gaiam.com results with Gaiam’s other operations. Amrion will account for its investment in Gaiam.com under the equity method.
Jirka Rysavy, CEO of Gaiam will serve as Chairman and John Mackey, CEO of Whole Foods Market, as President. They will jointly share the role of CEO. The company will be located in Broomfield, Colorado.
Gaiam.com, which launched operations in August 1999, is a lifestyle destination site specializing in high quality proprietary content and products for people that value the environment, personal development and wellness. Gaiam.com’s sales were $3.1 million for the first quarter ended March 31, 2000, a 53% increase from $2.0 million in the fourth quarter, which seasonally is the strongest quarter. Operating income for the first quarter was 6% of revenue.
In October 1999, Whole Foods Market established WholePeople.com, and in January of this year raised $35 million in equity financing. The WholePeople.com web site, launched in March, offers natural products and nutritional supplements plus thousands of unique and high quality products such as eco-friendly goods, cultural travel, books and advice for living well. WholePeople.com also operates two other nutritional supplement e-commerce web sites, HealthsmartVitamins.com and BioenergyNutrients.com. WholePeople.com’s assets, excluding the direct marketing business, were contributed to Gaiam.com in exchange for a 49.9% ownership.
“We respect Gaiam’s lifestyle approach to business. Their technological savvy and superb e-commerce execution will be tremendously beneficial to Whole Foods Market customers,” said John Mackey, CEO of Whole Foods Market. “We believe tremendous synergies exist in this partnership.”
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Whole Foods Market and Gaiam have entered into a joint marketing agreement to promote each other’s business and share customer data. The Companies will test a store-within-a-store concept, presenting Gaiam’s lifestyle products in 20 of Whole Foods Market’s larger stores.
“Gaiam clearly recognizes the value of the Whole Foods Market customer base which accounts for over 1.6 million weekly transactions in its retail stores. We are very excited to have the opportunity to market Gaiam and Gaiam.com’s products directly to those customers, many of whom will likely become Gaiam customers as well. This new relationship with Whole Foods Markets will enable Gaiam.com to offer the largest and best selection of lifestyle products in the industry,” said Jirka Rysavy, CEO of Gaiam, Inc.
ccgenesis, Inc., the creator of the Gaiam.com site, was selected as the exclusive provider of e-business professional services, including the integration of the WholePeople.com operation and the hosting of the Gaiam.com site.
The Lifestyles of Health and Sustainability (LOHAS) industry is expected to be a $230 billion market this year in the U.S. alone according to Natural Business Communication.
Whole Foods Market Inc., a Fortune 1000 company, owns and operates the country’s largest chain of natural foods supermarkets. www.wholefoodsmarket.com
Gaiam, Inc. is a lifestyle company marketing to customers who value the environment, personal development, healthy living, and a sustainable economy. www.gaiam.com
The Companies plan to jointly host an upcoming investor luncheon the date, time and location of which to be announced.
This press release includes forward-looking statements relating to matters that are not historical facts. Forward-looking statements may be identified by the use of words such as “expects,” “believes,” “will,” “should” or comparable terminology or by discussions of strategy. While the Companies believe their assumptions and expectations underlying forward-looking statements are reasonable, there can be no assurance that actual results will not be materially different. Risks and uncertainties that could cause materially different results include, among others, introduction of the Companies’ new products and services, the successful completion and integration of acquisitions, uncertainties relating to the Internet, the possibility of negative economic conditions, and other risks and uncertainties included in the Companies’ filings with the Securities and Exchange Commission. The Companies assume no duty to update any forward-looking statements.