Blog: Dean BestNow Whole Foods is in the private equity spotlight

Dean Best | 8 January 2009

Whole Foods Market, the US organics retailer, looks to be the latest company in our sector to be facing the glare of private equity investment.

In recent years, the likes of Heinz, Cadbury and Carrefour to name but a few have faced intense investor pressure from private equity shareholders to revitalise their businesses.

Some like Heinz, after a period of tension between investors and management, are bubbling along quite nicely.

Others, like Carrefour, are embarking on a new chapter following months of pressure from investors, which culminated in a change of chief executive.

Now, Whole Foods, which has suffered amid the economic downturn in the US, faces the prospect of intense scrutiny from private equity investors.

Today (8 January), it was revealed that investment fund Yucaipa Cos., headed by Ron Burkle, had taken a 7% stake in Whole Foods.

Yucaipa's move follows a similar one last month from private equity fund Green Equity Investors, which paid US$425m for 17% of Whole Foods.

The retailer, once one of Wall Street's shining lights, has fallen on tougher times as the downturn hits consumer spending. Expect greater input from its new investors into how the company can fight the recession.

Whether there will be further changes at the top of Whole Foods remains to be seen.


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