Whole Foods 2007 Annual Report Download - page 16

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Acquisition of Wild Oats Markets, Inc.
On August 28, 2007, we completed the acquisition of Wild Oats Markets, Inc., a leading natural and organic foods retailer in
North America, in a cash tender offer of $18.50 per share, or approximately $565 million plus the assumption of
approximately $148 million in existing debt. To fund the transaction, we entered into a five-year $700 million senior term
loan agreement. We also signed a new five-year $250 million revolving credit agreement, which replaced our existing $200
million line of credit.
At the time of our acquisition, Wild Oats had 109 stores in 23 states and British Columbia, Canada operating under four
banners: Wild Oats Marketplace (nationwide), Henry’s Farmers Market (in Southern California), Sun Harvest (in Texas),
and Capers Community Market (in British Columbia). All of our 11 operating regions gained stores, with our three smallest
regions, the Florida, Rocky Mountain, and Pacific Northwest regions, gaining critical mass. The acquisition provided us with
immediate entry into five new states: Arkansas, Indiana, Oklahoma, Tennessee and Utah, and 15 new markets: Bend, OR;
Cincinnati, OH; Indianapolis, IN; Lexington, KY; Little Rock, AR; Melbourne, FL; Memphis, TN; Naples, FL; Nashville,
TN; Reno, NV; Salt Lake City, UT; Tampa, FL; Tucson, AZ; Tulsa, OK; and Westport, CT.
On September 30, 2007, we completed the sale of all 27 Henry’s Farmers Market and eight Sun Harvest store locations and a
related Riverside, CA distribution center to a wholly owned subsidiary of Smart & Final, Inc., a Los Angeles-based food
retailer. Subsequent to year-end, the Company received proceeds of approximately $165 million for the net assets of those
stores, consisting primarily of fixed assets, inventory, and operating leases. Additionally, Whole Foods Market and Smart &
Final entered into a transition services agreement under which Whole Foods Market will continue to provide certain general
and administrative services for the 35 stores for up to two years. We currently anticipate that the revenue associated with this
agreement will be approximately equal to our incremental cost of providing the support.
Subsequent to year-end, we closed eight Wild Oats stores in Portland, OR; Tualatin, OR; Matthews, KY; West Vancouver,
Canada; Mission, KS; Littleton, CO; Omaha, NE; and Saugus, MA. We also temporarily closed the Wild Oats store in
Medford, MA for a major renovation; the store is scheduled to re-open in the spring of 2008. In addition, the Wild Oats
stores in Nashville, TN and Pasadena, CA were relocated to new Whole Foods Market stores in early November 2007. Net
of these closures and relocations, the Company had 63 Wild Oats and Capers locations on November 20, 2007, with plans to
close one additional Wild Oats store in Portland, ME in fiscal year 2008. The Company also plans to relocate seven Wild
Oats stores in British Columbia, Canada; Littleton, CO; Naples, FL; Indianapolis, IN; St. Louis, MO; Reno, NV; and Salt
Lake City, UT as the Whole Foods Market stores currently in development open in those areas.
The following table provides additional information by region about the number of Wild Oats stores acquired, divested,
closed and relocated, and the ending Wild Oats store count as of November 20, 2007.
11/20/07
Stores Stores Net Stores Stores Stores Store
Acquired Divested Acquired Closed Relocated Count
Florida 5 - 5 - - 5
Mid-Atlantic 6 - 6 (1) - 5
Midwest 6 - 6 (1) - 5
North Atlantic 5 - 5 (2) - 3
Northeast 1 - 1 - - 1
Northern California 1 - 1 - - 1
Pacific Northwest 11 - 11 (3) - 8
Rocky Mountain 23 - 23 (2) - 21
South 3 - 3 - (1) 2
Southern Pacific 38 (27) 11 - (1) 10
Southwest 10 (8) 2 - - 2
Total 109 (35) 74 (9) (2) 63
Average size – gross square feet 24,000 24,000
Total gross square footage (in thousands) 1,804 1,535
Average weekly sales – fourth quarter FY 2007 (1) 214,000 224,000
Sales per square foot – fourth quarter FY 2007 (1) 457 478
(1) Average weekly sales and sales per square foot calculations assume Wild Oats was owned the entire fourth quarter of
fiscal year 2007.