Wild Oats may be feeling its oats again — possibly thanks to Tesco’s plans to close its Fresh & Easy stores.
The retailer of organic and natural foods said on its website that it is “re-introducing the Wild Oats brand — natural and organic products” but provided no other details on its planned comeback.
Opening its first store in Boulder, Colo., in 1987, Wild Oats eventually became the second-largest natural and organic food chain, with more than 100 stores in 24 states and Canada by 2007. In February 2007 it was sold to larger rival Whole Foods Market Inc. for $670 million. Despite an objection by the Federal Trade Commission, the Court of Appeals allowed the acquisition in August that year.
A June 13 story in The Los Angeles Times said that billionaire Ron Burkle and his Los Angeles private equity company Yucaipa Cos. may be involved in the comeback attempt. The Times said that Burkle was the largest shareholder of Wild Oats when the brand was sold to Whole Foods.
The Times reported that Whole Foods sold the licensee rights to the Wild Oats brand to food distributor Luberski Inc. in 2010.
Bloomberg News reported anonymous sources have linked Burkle to negotiations with Tesco to buy Fresh & Easy store locations on the West Coast. British parent company Tesco put its small format Fresh & Easy stores up for sale earlier this year.
Wild Oats would face challenges if it relaunched, said Ed Odron, owner of Stockton, Calif.-based Ed Odron Produce Marketing Consulting.
“I think it is going to be an uphill battle for them,” he said. Growth of Whole Foods, Trader Joe’s and other formats over the last several years will leave Wild Oats with much ground to make up. However, Odron said an improving economy is positive for the upscale format.
If Wild Oats is interested n acquiring Fresh & Easy stores on the West Coast, Odron said the locations of the store will be critical. “You wouldn’t think that Wild Oats would be interested in some of those lower income neighborhoods,” Odron said. “They would have to pick and choose which ones they would be interested in.”
Based on the continuing success of Whole Foods and the expansion of Greensboro, N.C.-based The Fresh Market, there appears to be space in the marketplace for another upscale retailer, said Bruce Peterson, president of Peterson Insights Inc., Fayetteville, Ark. Peterson also said the Wild Oats banner has some positive brand equity with consumers.
Like Odron, Peterson believes store locations will be critical to Wild Oats if it does decide to relaunch.
“Depending on the sites (they) get, I think a re-emergence of Wild Oats could have some legs in the marketplace,” he said.