Activist Investor Pressures Whole Foods To Quicken Turnaround Plans, Pursue Possible Sale
Whole Foods Market is under pressure from an activist investor that wants the chain to speed up its turnaround plans and to explore a tentative sale to combat stagnant growth.
Investment firm Jana Partners holds a large interest in the upscale organic food grocer, accounting for an 8.8% stake in the company, and is making a handful of demands that include Whole Foods beefing up its tech capabilities to keep pace with competitors and looking into willing bidders for a sale, the Wall Street Journal reports.
Company shares rallied Monday following the news of a potential sale and an accelerated turnaround, jumping roughly 12% to $34.66, the highest increase in almost two years. Sales have plummeted to a 10-year low, and the chain has been struggling to overcome six consecutive quarters of comparable sales declines that have resulted in store closures and cost-saving initiatives.
This news surfaced in a regulatory filing Whole Foods reported Monday. In response to investor concerns, the company said it is exploring the options addressed by shareholders.
“We are committed to driving value for all Whole Foods Market shareholders and will continue to act to achieve this important objective,” a Whole Foods spokeswoman said, according to the WSJ.