Produce suppliers accustomed to dealing with Sprouts Farmers Market and Henry’s Farmers Market in the Southwest will have a larger entity to deal with as the two chains are merged into one in the coming months.
The 98 retail grocery stores currently operated by the two firms founded by the Boney family will eventually operate under the Sprouts name, according to a deal announced Feb. 16 by Apollo Management LP, which is acquiring majority ownership of both chains.
Phoenix-based Sprouts also revealed plans to open 10 new stores this year after the transaction closes early in the second quarter.
Described on their company websites as part of the “farmers market specialty segment,” both Sprouts and Henry’s focus on natural and organic products. They carry every major grocery category.
A website launched to provide information on the merger, www.1farmersmarket.com, states that the combined stores will continue to have a “strong focus on fresh, high quality produce at great value.”
Company statements indicate that the combined operation will offer a greater variety of fresh products and that the combined buying power should increase efficiency in purchasing and distribution.
Together, Sprouts and Henry’s have stores in California, Texas, Arizona and Colorado. Sprouts president Doug Sanders said that there is not much overlap in the stores’ locations. The Apollo deal calls for Sanders to remain as president of the combined operation with Sprouts co-founder Shon Boney remaining as chief executive officer.
Henry’s was founded in San Diego in 1943 by Henry Boney and was acquired by Wild Oats Markets in 1999, which also bought San Antonio-based Sun Harvest at that time. There was a three-year, non-compete agreement as part of that deal and when it expired members of the Boney family founded Sprouts in Phoenix.
In 2007 Whole Foods bought Wild Oats and sold the Henry’s and Sun Harvest stores to Smart & Final. Later in 2007 Apollo Management bought Smart & Final. Apollo Management is an affiliate of Apollo Global Management LLC, which also includes Apollo Investment Corp, whose publicly listed funds include U.S. Foodservice, Ralphs Grocery Co. and Dominick’s Supermarkets.
The annual revenues of the combined Sprouts and Henry’s operation are expected to be in excess of $1 billion, according to an Apollo Management news release.