Skip navigation
Retail Traffic

Wild Oats sows growth strategy

Wild Oats Market Inc. is taking root and ready to expand thanks to a recent $48 million stock offering. The natural foods grocer plans to open 58 new stores in the next three years.

The Boulder-based chain scored funding in early September, following a major corporate restructuring. “The funding unleashes growth opportunities going forward,” says analyst Carole Buyers of RBC Capital Markets in Boulder.

Wild Oats, which has 101 stores in 23 states, will use two-thirds of the capital to fund new store growth, according to company spokeswoman Sonya Tuitele. “We're looking at having greater density in our store markets in the Southwestern part of the U.S.,” Tuitele says. “Beyond that, we're looking at potential new markets in the Midwest or East.”

Analysts think there are plenty of growth opportunities for Wild Oats, which is the second-largest natural foods grocer behind Texas-based Whole Foods. Real estate industry experts suggest that Wild Oats may look to grow in new markets where Whole Foods currently has few or no stores, such as Birmingham, Ala.

Wild Oats plans to move forward with its new prototype store modeled after the recently opened Long Beach, Calif., location. The Long Beach store, which has a nautical boat house theme and overlooks the city's marina, opened in April.

The nearly 26,000-sq.-ft. prototype store features a large produce department with 175 organic items grown mostly by local and regional farmers, plus 15 varieties of tropical fruits, 13 types of lettuce and 14 kinds of fresh tomatoes. The store also boasts a sit-down Wild Café area, offering sushi, pizza and sandwiches, and a Wild Oasis juice, smoothie and java bar. Café tables overlook the Long Beach Marina. The store also focuses on full-service meat and seafood counters, including an array of ready-to-cook entrees, but carries fewer packaged and canned items.

“The Long Beach store is hugely successful — and the most successful grand opening in the company's history,” Tuitele says. “The prototype is working.”

Wild Oats plans to open three stores by year's end in southern California. Next year, the chain plans 10 stores in existing markets, including Costa Mesa, plus new markets Portland, Maine, and Louisville, Ky. Plans call for accelerating growth beyond 2003, with 20 new stores each in 2004 and 2005.

The aggressive growth comes after an overexpansion in the late-1990s, which left the company bleeding red ink. In early 2001, Perry Odak replaced Wild Oats founder Mike Gilliland as chief executive and the chain has since closed or sold 23 unprofitable or poorly located stores.

Odak has returned Wild Oats to profitability. In 2001, Wild Oats racked up nearly $900 million in sales, while comparable store sales at stores open a year or more rose 4% last year.

TAGS: Retail
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.