WILD OATS MARKETS RATIONALIZES STORE PORTFOLIO, CLOSING 8 STORES IN UNDER-PERFORMING LOCATIONS
Significant Savings Realized from Closures to be Reinvested in Remaining Stores
Boulder, Colo. (Nov. 14, 2006) - Wild Oats Markets, Inc. (NASDAQ: OATS), a
leading national natural and organic foods retailer, today announced it will
close all five of its Henry's Farmers Market stores located in Arizona and three
additional Wild Oats stores in other markets, effective Dec. 16, 2006.
Additionally, the Company announced it will not open a Henry's store under
development in the Phoenix market, and will take an asset impairment charge in
the fourth quarter for two underperforming Wild Oats stores in other markets,
one of which will close when its lease expires in 2007.
After an extensive financial review of its store portfolio, Wild Oats determined
these stores are not in optimal locations for sales growth. All of the Henry's
Farmers Markets stores in and around the Phoenix area will be closed, including
two stores in Gilbert, and one each in Glendale, Peoria and Phoenix. The two
Wild Oats stores in the Phoenix area, on Camelback Rd. and in Scottsdale, will
remain open, and the Wild Oats brand will be the Company's focus for future
growth in the Phoenix market. Wild Oats stores in the following locations will
also be closed on Dec. 16, 2006: Village Pointe Center, Omaha, Neb.; Fort
Collins, Colo.; and West Jordan, Utah.
The significant savings realized from these store closures will be re-invested
in the Company's existing store base to drive higher sales performance through
various marketing, merchandising and operational initiatives. Wild Oats Markets
expects to incur approximately $25.5 million in restructuring charges in the
fourth quarter of 2006 related to asset impairment, severance and lease-related
liabilities. Additionally, in the fourth quarter of 2006, the Company expects to
incur incremental operational costs of approximately $1.7 million related to the
"With a sophisticated real estate model in place for our Wild Oats stores and a
focus for Henry's growth in Southern California, we intend to continue to invest
to grow our brand and our business, including reinvestment in existing stores,"
said Gregory Mays, Chairman and CEO of Wild Oats Markets, Inc. "We are building
on a strong foundation, and our focus will be to grow sales in existing stores
while using our improved real estate model to select high-potential sites for
new stores, like those opened so far in 2006.""Henry's is a very compelling chain that fills a unique niche in the Southern
California specialty foods market," said Mr. Mays. "We believe that the Phoenix
stores were not performing at Henry's typically strong levels because of the
fiercely competitive nature of the Phoenix food retail market, and the fact that
Henry's was a new entrant to Phoenix two years ago. Therefore, we have very
little brand awareness in a crowded market."
Wild Oats Markets is focused on growth through new store development. Currently
the Company has 19 leases or letters of intent signed for new Wild Oats and
Henry's stores scheduled to open in the fourth quarter of this year, in 2007 and
into 2008. Thus far in the fourth quarter, the Company has opened two Henry's
stores in Southern California and will open two more before year's end.
ABOUT WILD OATS:
Wild Oats Markets, Inc. is a nationwide chain of natural and organic foods
markets in the U.S. and Canada with annual sales of more than $1.1 billion. The
Company operates 115 natural foods stores in 24 states and British Columbia,
Canada. The Company's markets include: Wild Oats Natural Marketplace, Henry's
Farmers Market, Sun Harvest and Capers Community Markets. For more information,
please visit www.wildoats.com.
RISK FACTORS AND UNCERTAINTIES
This release contains forward-looking statements, as defined in the Private
Securities Litigation Reform Act of 1995, which involve risks and uncertainties.
Such forward-looking statements include: the number of stores the Company plans
to open, remodel and relocate in the future, and the anticipated performance of
such stores; and expected future comparable store sales, revenues and earnings
per share, future financial measures and prospects for favorable growth and
The statements made by the Company are based on management's present
expectations, and actual results may differ from the results indicated or
otherwise implied by such forward-looking statements due to certain risks and
uncertainties including, but not limited to: the Company's ability to execute,
the results of merchandising and marketing programs, the impact of competition
and other factors as are set forth in the Company's SEC filings, including the
Annual Report on Form 10-K for the fiscal year ended December 31, 2005 and the
Company's quarterly reports on Form 10-Q. These risk factors may not be an
all-inclusive enumeration of the business risks faced by Wild Oats. Investors
should recognize that the reliability of any projected financial data diminishes
the farther in the future the data is projected.
The statements made by management of the Company and summarized above represent
their views as of the date of this press release, and it should not be assumed
that the statements made herein remain accurate as of any future date. Wild Oats
does not intend to update these statements and undertakes no duty to any person
to effect any such update under any circumstances.
Dates Referenced Herein and Documents Incorporated by Reference