Earth Fare Shutting All Stores

In another signal of distress among natural and organic food retailers, the pioneering natural foods retailer Earth Fare announced that it would be closing all of its stores.

In a statement, the Asheville, N.C.-based retailer said challenges in the retail industry impeded the company’s progress and its ability to refinance its debt.

“As a result, Earth Fare is not in a financial position to continue to operate on a go-forward basis. As such, we have made the difficult, but necessary decision to commence inventory liquidation sales while we continue to engage in a process to find potential suitors for our stores.”

WGB previously reported that Earth Fare was seeking to sell itself, and it had recently closed a pocket of stores. The chain’s forthcoming shutdown comes on the heels of a Chapter 11 filing and mass store closure by Lucky’s Market, another retailer operating natural and organic stores with a heavy presence in Florida. In both cases, it appears that heightened competition—including defense by market leaders—and effects of a gradual improvement among better-capitalized conventional and discount chains in pricing and assortment of fresh and natural and organic foods had blunted their advantages. Both chains had also sought buyers to no avail.

“Earth Fare has been proud to serve the natural and organic grocery market, and the decision to begin the process of closing our stores was not entered into lightly. We’d like to thank our team members for their commitment and dedication to serving our customers, and our vendors and suppliers for their partnership,” the company said in a statement.

Photograph courtesy of Earth Fare

Over the past few years, Earth Fare has implemented numerous strategic initiatives aimed at growth and expansion, as well as enhancing the customer experience.

As recently as October, Earth Fare CEO Frank Scorpiniti told the Jacksonville Business Journal that the 50-store chain would pursue aggressive expansion plans in Florida, and said it had as many as 100 new stores in its development pipeline. Scorpiniti had also spoken about the success of having adopted artificial intelligence to help guide pricing and promotions.

Earth Fare was founded as “Dinner for the Earth” in Asheville in 1975. Private investment firm Oak Hill Partners acquired a majority stake in the company in 2012. For years, the company differentiated itself behind high ingredient standards and what it called a “boot list” of ingredients and formulations not available in stores.

Over recent years, conventional food retailers have invested heavily in building the kinds of assortments and customer appeal that their runaway niche competitors specialized in. Walmart, for example, has made a big effort to improve assortment and supply chain that has raised the profile of its once-substandard produce departments. Aldi has expanded assortment of health and wellness-related products at sharp pricing, and retailers such as Kroger, Ahold Delhaize and Albertsons Cos. have built powerful store-brand natural and organic selections.

The recent Lucky’s shutdown has also evidently reflected in declining stocks for companies such as Sprouts Farmers Market and Natural Grocers by Vitamin Cottage. Sprouts is trading at a 52-week low, having lost 20% of its price since the beginning of the year and about $1 billion in market capitalization since the same point a year ago.

Inventory liquidation sales are beginning at Earth Fare, which also said store fixtures would be available for purchase.

Earth Fare said it informed all its employees of the impending closure of its stores and corporate office. During this time, the company said it would continue to pursue a sale of assets, in whole or in parts.