Whole Foods Market is a popular supermarket chain with operations in the U.S. and globally. The company is known for its organic and plant-based products. Recently, Whole Foods has been in the news for shutting down some of its stores. Is Whole Foods a publicly-traded company and does it have stock?
Whole Foods Markets was founded in 1980 by John Mackey and Renee Lawson Hardy, who were the owners of Safer Way Natural Foods, and Craig Weller and Mark Skiles who owned Clarksville Natural Grocery. The company is headquartered in Austin, Texas, and has more than 500 locations spread across the U.S., U.K., and Canada.
Whole Foods isn't a publicly-traded company.
Whole Foods was a publicly-traded company until mid-2017. However, Amazon acquired the company for $13.7 billion in 2017. Amazon planned to grow its grocery business through the Whole Foods acquisition. The company announced the acquisition in June 2017, it closed in August the same year, and Whole Foods became a private company.
Amazon acquired Whole Foods at a premium.
Amazon paid $42 per share in cash to existing whole Foods stockholders, which was a 27 percent premium to its closing price the day before the announcement. It's usual for companies to offer a premium to existing stockholders since it cajoles them to accept the offer. However, Whole Foods’ stock price rose even above what Amazon offered for the company.
The price action was a sign that markets expected a bidding war for the supermarket chain. Eventually, the deal between Amazon and Whole Foods concluded. John Mackey, who was Whole Foods’ CEO when the deal was announced, remained in the position.
John Mackey announced his retirement plans in 2021.
In 2021, Mackey announced that he will retire as Whole Foods' CEO. Jason Buechel, who is currently Whole Foods COO, will assume the position of CEO effective September 1, 2022.
Incidentally, Amazon’s founder and CEO Jeff Bezos also quit as the company’s CEO in 2021. He handed over the baton to Andy Jassy, who was then heading the company’s cloud business — the key driver of Amazon’s profitability.
Amazon's stock price has sagged.
Amazon’s stock price has sagged under Jassy and it was the worst-performing FAANG stock in 2021. The company has been missing out on earnings expectations, which has taken a toll on the stock price. Like many other COVID-19 pandemic winners, Amazon has been facing tougher YoY comps. The super high growth that the company witnessed during the lockdowns is now unwinding and its revenue growth is down to single digits.
Amazon is overstaffed.
During the earnings call for the first quarter of 2022, Amazon admitted that it was overstaffed. Its workforce, which includes employees and contractors, has already come down from the 2022 peak and more cuts look likely.
Amazon will close six Whole Foods stores.
Amazon’s physical retail business has been doing well since people started shopping at brick-and-mortar stores. Still, Amazon is closing six Whole Foods stores spread across four states. While the company hasn’t specified the reasons behind the store closures, it's normal for retail companies to review the locations periodically.
Amid slowing growth and rapidly rising costs, Amazon is looking at aggressive cost controls. Closing some Whole Foods stores should also be seen in the same light.