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Monday, March 9, 2009

For sale: the Hillsboro Whole Foods store

The Federal Trade Commission and Whole Foods have reached a settlement of the government's antitrust suit against the grocery chain in connection with its acquisition of the competing Wild Oats stores in 2007. And as part of the deal, Whole Foods has agreed to sell a bunch of the former Wild Oats stores that it bought in the summer of 2007. One of the stores slated for sale is Whole Foods on Cornell Road in Hillsboro -- which if I am not mistaken is a relatively new joint that never was a Wild Oats store to begin with.

Anyway, the FTC explains:

The 32 former Wild Oats stores that Whole Foods must divest comprise 13 currently operating and 19 formerly operating stores. These stores represent a significant portion of the Wild Oats stores that Whole Foods acquired and is currently operating, as well as all of the formerly operating Wild Oats stores for which leases still exist, within the alleged geographic markets. The divestitures will provide competitive relief in the majority of geographic markets defined in the Commission's administrative complaint and will allow consumers in these markets to once again enjoy competition among premium organic markets. The newly divested stores also could provide a "springboard" from which an acquirer might expand into other geographic markets.

The order will immediately place the responsibility for marketing and selling the stores with a divestiture trustee, who will have six months to sell the Wild Oats stores and related assets to one or more FTC-approved buyers. If the trustee has not sold the assets within six months, the Commission may extend the time provided to do so for an additional six months. The order also will require Whole Foods to maintain the viability and competitiveness of the stores until the divestiture is complete.

Also included in the deal are Wild Oats stores, on Jean Road in Lake Oswego and on Burnside Road in Gresham, that Whole Foods shut down shortly after the acquisition. It's not clear what's left of those operations to sell, but whatever there is (maybe the leases) is supposed to be put on the block.

"Forcing" Whole Foods to "sell" locations that it has already closed doesn't sound like much of a victory for the feds. Shedding operating stores is a more serious business, but one has to wonder how many of those Whole Foods already wanted to get rid of. The debt from the Wild Oats deal has not been kind to its cash flow.

Moreover, there's no telling whether buyers will come forward in this economy to pick any of the listed stores up. We wouldn't be surprised if old John Mackey of Whole Foods has spent a good part of the weekend laughing into his sock puppet at how the whole thing has turned out.

Comments (4)

As I've stated before, the antitrust suit smacked of wasted resources and needless legal posturing for the sake of appearances (and who knows what else)... and now with these details, it's plainly obvious. The Gresham location was a ghost town most of the time, and the other locations suffered from stiff competition.

I'm sure all the private grocers who were swept into this mess at great cost are wondering if it was worth it.

Whoever thinks WO/WF doesn't have any competition needs to visit the Hawthorne Freddies, those guys have certainly had a scare thrown into them and are fighting back big time.

Mackey sounds like a douche, but so do the folks at the FTC who thought Whole Foods is a monopoly (same goes for the sat radio merger).

Yup, the whole pocketbook store on Cornell is BRAND-NEW, I helped work on it. BTW - the folks that I dealt with from whole paycheck - real pains-in-the-a**, not fun to work with at all. I don't shop at any of their stores, only been in two of them and am completely unimpressed (although what they wanted to charge made me stand up and take notice).

that Wild Oats in LO on Jean Way has been vacant for at least 4 years. I'm sure Whole Foods would like to get rid of it.

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