Organic Growth: Wild Oats May Prove To Be Better Bet Than Whole Foods
Wild Oats Markets Inc. long has seemed like a plate of cold leftovers next to Whole Foods Market Inc., its bigger and higher-end rival in the burgeoning natural-and-organic-foods grocery industry. But it may just be the tastier stock.
That conclusion was bolstered by the stock market's reaction to last week's news that Wild Oats Markets wouldn't renew the contract of Chief Executive Perry Odak and yesterday's announcement that he had quit. Though Mr. Odak, 61 years old, had led the Boulder, Colo., company through a five-year turnaround, the stock price rose both times. Mr. Odak was criticized for being too timid in trying to grab customers who favor Whole Foods' sprawling stores.
"Investors would be happier to see a mistake being made being too aggressive in new-store formats than to see the opposite, which is them being too conservative," says Eric J. Larson, senior research analyst at Piper Jaffray & Co. in Minneapolis, who rates the stock the equivalent of a "hold" and doesn't own it.
Wild Oats' annual sales-growth rate of 3% to 5% at stores open at least a year lags behind the 7% to 9% average for the natural and organic industry, Mr. Larson says. Whether it can catch up may depend on who permanently succeeds Mr. Odak. The company said Gregory Mays, who became chairman after joining the board in July, will be interim CEO until it hires a successor. In 4 p.m. composite trading on the Nasdaq Stock Market, the stock was up nine cents to $17.80.
It is unclear whether billionaire Ron Burkle's investment firm, Yucaipa Cos., Wild Oats' largest shareholder, played a role in Mr. Odak's departure. The interim CEO, Mr. Mays, also serves on the board of Pathmark Stores Inc., a supermarket chain that also counts Yucaipa as its largest shareholder. Wild Oats spokeswoman Sonja Tuitele says that as far as she knows, Yucaipa had no involvement. A Yucaipa spokesman didn't return calls.
Mr. Odak, who also left the board, couldn't be reached for comment.
Wild Oats was founded in 1987 by Michael Gilliland and his wife, Elizabeth Cook, who purchased a vegetarian food store in Boulder. In 1991, they opened their first supermarket-size store in Santa Fe, N.M. They renamed the company Wild Oats Vegetarian Market and began buying smaller stores. They eschewed high-brow touches like offering extensive prepared foods and premium-cut meats that fast-growing Whole Foods embraced.
After an initial public offering in 1996, Wild Oats grew mainly through acquisitions and wound up with stores with nearly 20 names. When Mr. Odak took over in 2001, the company had $893.2 million in sales but was 90 days from a bankruptcy-court filing, executives say. Mr. Odak closed underperforming stores, announced layoffs and hired managers from PepsiCo Inc., Gap Inc. and his former employer, Ben & Jerry's. He experimented with store formats, including some nearly a third larger than the company's average.
The company now has 114 stores in 24 states and Canada, mostly called Wild Oats Natural Marketplace or Henry's Farmers Markets. Last year, it posted sales of more than $1 billion. Its market capitalization has grown to $521.8 million as its shares have more than doubled since 2001.
Whole Foods remains far ahead in terms of size, with 187 stores in the U.S., Canada and the United Kingdom, and sales last year of $4.7 billion. Its stock, which was up 55 cents, or 0.9%, to $65 a share yesterday in 4 p.m. composite trading on the Nasdaq Stock Market, has more than tripled in the past five years, but it is trading far off last year's peak of $79.90 in December. Its total market value is $9.1 billion.
Whoever takes the reins at Wild Oats has the opportunity to seize on American consumers' seemingly insatiable appetite for organic and natural foods. Both Wild Oats and Whole Foods face growing competition from mainstream grocers Kroger Co., Safeway Inc., and Wal-Mart Stores Inc. that are expanding their natural- and organic-food offerings, and companies like SuperValu Inc. that are opening free-standing outlets. Wild Oats has been mentioned by analysts as a potential takeover target for big grocers pursuing the free-standing strategy, a factor that could drive up its stock price.
Michael Krestell, a research analyst at M Partners in Toronto, says the average size of Wild Oats stores -- between 23,000 and 24,000 square feet -- presents a strong counterpoint to Whole Foods, which is increasingly opening 80,000-square-foot stores in suburban and ex-urban locales. The smaller stores, Mr. Krestell argues, allow Wild Oats to snatch up parcels of land in urban locations and put itself squarely in front of Whole Foods' core urban, educated and affluent consumer base.
"The result," says Mr. Krestell, "is a nimble real-estate-operations strategy that can be executed quickly." Mr. Krestell has a "buy" rating on the stock and owns some of it.
In its newer stores Wild Oats has doubled the size of its meats sections and started offering higher-quality cuts of meat and fresher fish, and placing them in more-attractive glass displays.
Andrew Wolf, an analyst at investment bank BB&T Capital Markets, in Richmond, Va., says Wild Oats hasn't made these improvements in enough stores -- a criticism that a new CEO could address. Wild Oats also still fails in one key highly profitable area where Whole Foods is supreme: prepared meals.
Wild Oats' Ms. Tuitele says many of the innovations will be introduced during remodels of existing stores.
There are other reasons to be optimistic about Wild Oats: The company has its own line of branded products, which are distributed in Chicago by Peapod, an Internet grocer. In September, the companies said they would expand that relationship to the Baltimore-Washington market. That will likely heighten consumer awareness of Wild Oats' brand, especially if the two companies move into other markets. That, in turn, could entice traditional grocers to begin carrying Wild Oats-branded products as they increasingly move to satisfy demand for such goods, analysts say.
"There's a huge opportunity in this market, and Wild Oats should be capturing its share of that opportunity," Mr. Larson says. "They've got all the right ingredients. It's just a matter of getting the proper execution."
Wild Oats值得买进吗？
长期以来，在迅猛增长的天然有机食品行业，Wild Oats Markets Inc.相比其更强大的高端竞争对手Whole Foods Market Inc.就像是一盘残羹冷炙。但或许Wild Oats的股票恰恰才是上选。
从投资者对上周有关Wild Oats不会与首席执行长佩里?奥达克(Perry Odak)续约以及对本周奥达克已辞职的消息的反映来看，我们的结论得到了进一步的印证。尽管现年61岁的奥达克曾领导Wild Oats实现了连续5年的复苏，但这两次消息宣布后公司股价却均告上扬。很多人批评奥达克在与Whole Foods争夺客户方面手腕太软。
“投资者可能宁愿看到他们因策略过激而犯错误，也不希望他们太保守，”Piper Jaffray & Co.的高级研究分析师埃里克?拉森(Eric J. Larson)说。他将Wild Oats的评级定为持有。他本人不持有该股股票。
拉森说，Wild Oats开张一年以上的连锁店年销售增长率为3%-5%，远低于天然和有机食品行业7%-9%的增幅。该公司能否迎头赶上可能要取决于谁来接任奥达克。公司表示，在正式的继任者选出之前，董事长格雷戈里?梅斯(Gregory Mays)将担任临时首席执行长。那斯达克市场周三收盘，Wild Oats涨9美分，至17.80美元。
目前尚不清楚亿万富翁罗恩?巴克尔(Ron Burkle)的投资公司Yucaipa Cos.，即Wild Oats的最大股东，是否与奥达克的离职有关。临时首席执行长梅斯同时还担任超市连锁店Pathmark Stores Inc.的董事，后者的最大股东也是Yucaipa。Wild Oats发言人索尼娅?图特利(Sonja Tuitele)表示，据她所知Yucaipa与此时无关。Yucaipa的发言人未回复记者的采访电话。
奥达克同时也将离开董事会。记者未能联系到奥达克对此发表评论。
1987年，迈克尔?格利兰德(Michael Gilliland)和他的妻子伊丽莎白?库克(Elizabeth Cook)在波尔德购买了一家素食店，并由此创立了Wild Oats。1991年，他们在新墨西哥州圣达菲成立了他们的第一家超市规模的食品店。他们将公司取名为Wild Oats Vegetarian Market，并开始收购一些小商店。他们避开了难度较大的诸如提供深加工食品和精切肉类等业务，而这些业务正是Whole Foods所热衷的。
Wild Oats于1996年上市，此后通过并购逐渐发展壮大起来。公司管理人士称，当奥达克2001年接过首席执行长一职时，该公司销售额已达到8.932亿美元，不过也还差90天就要申请破产保护。奥达克关闭了不太景气的店面，宣布裁员，并从百事公司(PepsiCo Inc.)、Gap Inc.和他的前雇主Ben & Jerry's挖来了管理人士。
该公司目前拥有114家分店，遍布在美国24个州和加拿大地区，主要在Wild Oats Natural Marketplace或Henry's Farmers Markets名下运营。公司去年销售额超过10亿美元。由于Wild Oats股价自2001年以来翻了一倍以上，其市值也增至5.218亿美元。
不过在规模上Whole Foods仍然遥遥领先，该公司在美国、加拿大和英国共计拥有187家分店，去年销售额达到47亿美元。那斯达克市场周三收盘，该股上涨0.55美元，至65美元，涨幅0.9%，过去5年间上涨了两倍以上，不过目前已远低于去年12月创下的79.90美元高点。公司总市值为91亿美元。
不管由谁掌管Wild Oats，都有 会抓住美国消费者对有机天然食品无限渴求的大好时机。Wild Oats和Whole Foods都面临着来自主流零售商Kroger Co.、Safeway Inc.和沃尔玛连锁公司(Wal-Mart Stores Inc.)以及SuperValu Inc.等公司日益激烈的竞争。主流零售商正在扩大其天然和有机食品的种类，而SuperValu等公司则在开设独立店铺。分析师们曾表示，Wild Oats可能成为某些有意推进独立店面策略的大型零售商的收购对象，而这有望提振该公司的股价。
M Partners驻多伦多的研究分析师迈克尔?克雷斯特尔(Michael Krestell)表示，Wild Oats的店面平均面积为23,000至24,000平方英尺，这与Whole Foods在郊区城镇增设80,000平方英尺面积的做法大为不同。他表示，开设小型店铺可以让Wild Oats在城区立足，并直接面对Whole Foods的核心消费群──受过教育的、富裕的城市消费者。
克雷斯特尔说，“结果是，这种地理位置选择富于灵活性的策略可以得到迅速实施，”他对该股的评级为“买进”，他持有Wild Oats的部分股票。
Wild Oats在新开设的店铺中将肉类柜台的面积扩大了一倍，并开始供应更优质的肉类食品和更新鲜的鱼类，并将这些商品摆放在更为吸引人的玻璃柜台中售卖。
投资银行BBT & Capital Markets分析师安德鲁?沃尔夫(Andrew Wolf)表示，Wild Oats并没有在足够的店铺中作出这种调整──新上任的CEO可以着手解决这一问题。而在Whole Foods表现突出的一个高利润率关键领域，Wild Oats也没能取得进展：那就是预加工肉类食品。
Wild Oats的图特利表示，公司将在对现有店铺进行改造的过程中实施许多新的调整。
对Wild Oats持乐观态度还有其他理由：该公司拥有自有品牌的商品，这些商品在芝加哥由互联网零售商Peapod分销。今年9月，这两家公司表示，将把合作领域扩大到巴尔的摩和华盛顿市场。这可能会增强消费者对Wild Oats品牌的认知度，尤其是在两家公司进入其他市场的情况下。分析师表示，反过来，这可能会吸引传统零售商销售Wild Oats的产品，因为他们正在努力满足市场在这方面的需求。
拉森说，“在这个市场蕴含着巨大的商机，Wild Oats应该抓住属于自己的机会。他们万事俱备，只要执行得力就大功告成了。”
Steven Gray
