WHOLE FOODS PLAYING MERCHANT OF VINO ROLE

RICHARD TURCSIK

AUSTIN, Texas -- Whole Foods Market here will be stepping up development of its wine departments as a result of its recent acquisition of the Merchant of Vino chain of stores, SN has learned.

Whole Foods completed its acquisition of Farmington Hills, Mich.-based Merchant of Vino, a six-unit natural-food and gourmet specialty operator, Dec. 29. The deal marks Whole Foods' entry into the Detroit market.

John Mackey, chairman and chief executive officer of Whole Foods Market, called Merchant of Vino "one of the best wine retailers in the country," during a press conference about the acquisition.

Soon after the acquisition was completed, Marc Jonna, Merchant of Vino's former president and a son of the founder, was named national wine buyer of Whole Foods Market, said Cindy Butts, the chain's director of investor relations.

"We certainly hope to leverage his expertise in that area across our other stores," she said. It has not yet been decided what changes will be made to Whole Foods wine departments, according to Butts.

Whole Foods operates more than 75 natural-food supermarkets across the country, and the majority of those sell wine. However, some locations, such as those in New Jersey, are barred from selling wine.

The Merchant of Vino stores range in size from 4,000 to 23,000 square feet, and a 33,000-square-foot unit is under construction in Ann Arbor, Mich. Four of the current units are natural-food supermarkets, while the two smaller stores are specialty wine and gourmet food shops.

For the 10 months ended Oct. 31, 1997, Merchant of Vino had revenues of approximately $42 million, an increase of 32% over the same period in the prior year.

Butts said no immediate changes are planned for Merchant of Vino stores, although the tag line "a Whole Foods Market" is expected to be added to the store banners and advertisements.

"Merchant of Vino has a strong name established and we certainly don't want to upset any customers by making any drastic changes," Butts said.