BOULDER, Colo. (FNS) -- Wild Oats Market here said the company currently faces severe challenges, but added that the natural food store chain is aggressively working to overcome them under the leadership of its new chief executive officer.
Perry Odak, CEO since March and formerly CEO and president of Ben & Jerry's Homemade, South Burlington, Vt., told shareholders at Wild Oats' annual meeting here last week that the company's problems were growing pains common to rapidly expanding entrepreneurial companies.
"In trying to evolve to the next level, we are like lots of companies who grow, slip and then evolve as they reinvent themselves," he said.
Wild Oats operates 109 stores in 23 states under the Wild Oats, Henry's Marketplace, Nature's Fresh and Nature's Northwest, Sun Harvest Market, and Capers Community Market names.
Odak said he plans to retool the company by the end of the third quarter. "We are looking at reinventing the whole business -- keeping what makes sense, changing what doesn't and adding where we need to," he said.
He added that no major financial improvements can be expected until the re-evaluation is completed.
Wild Oats' reassessment comes after two repositioning efforts during 2000, in which the chain closed several stores and discontinued e-commerce. The company posted a net loss of $15 million for fiscal 2000, compared with net income of $12.5 million in 1999. It also lost $118,000 in first-quarter 2001, but reported its first increase -- 1% -- in comparable-store sales since 1999's fourth quarter. Sales in 2000 rose 16.2% to $838.1 million.
Odak told shareholders that he is examining Wild Oats' organizational structuring, staffing levels, marketing, advertising, logistics and technology, among other areas. Founded in 1987, he said Wild Oats now "needs to evolve to be more managerial" without losing its entrepreneurial heritage.
He said his two primary focuses would be to increase same-store sales, which slid 2.6% in 2000, and create a "paradigm shift" in coming to market faster.
Among needs Odak has identified so far are reducing the company's organizational layers, boosting centralized purchasing, stepping up efforts to integrate recent acquisitions, examining whether Wild Oats now has the "bandwidth" to grow internally, expanding previous market research about its target customer, slowing employee turnover and reducing shrinkage, which he said is now six points higher than the industry average.
Wild Oats also plans pricing studies vs. competitor natural food stores and conventional supermarkets, and a procurement audit of its large number of vendors.
Stockholders criticized the chain for malaise throughout the stores. One woman castigated a "cultural drift" and loss of purpose. Another said she was "disgusted" with store appearance, remarking that "you used to have trouble finding a parking place, now you are lucky to find people there."
Odak said he agreed with the criticism. "This is a company that doesn't have a clear, articulated mission or value statement for each other and our customers," he said, adding that such a statement will be developed in coming months.
"Our values become a part of our brand," he said. "We must walk the talk."
Amid the faultfinding, however, Odak struck a positive tone, telling a stockholder that he expects to see "our stores revitalized in presentation, where people find shopping a wonderful experience, and where we are a viable competitor in the marketplace. That has to happen in the next 12 months for me."
