Source: LOHAS Weekly Newsletter
Published: Saturday, November 01, 1997

AUSTIN, TX—Whole Foods Market (WFMI), the nation’s largest retailer of natural products, has acquired the six-store, Detroit-area specialty foods retailer Merchant of Vino for 1.03 million shares of common stock in a deal valued at about $41 million.

Merchant of Vino, a family-run business based in Farmington Hills, MI, and founded by husband and wife Edward Jonna and Juliette Jonna in 1975, has annual sales of approximately $50 million. Four of the six stores range in size from 18,500 sq. ft. to 23,000 sq. ft.; two locations are 4,000 sq. ft. and 8,000 sq. ft., respectively. A 33,000-sq.-ft. seventh Merchant of Vino store is slated to open in Ann Arbor, MI, in 1998.

According to sources, Whole Foods outbid retail rival Wild Oats Market (OATS) for the Merchant of Vino stores by almost two to one. The acquisition gives Whole Foods a strong market position in the greater Detroit area, says John Mackey, WFMI chairman and CEO. Mackey also says the company will benefit from Merchant of Vino’s extensive wine retailing experience.

According to Kim Galle, VP with Adams, Harkness & Hill in Boston, the stores will be named Merchant of Vino/Whole Foods Market. The acquisition will be neutral to earnings in the near term and accretive to earnings toward the end of FY98 and into FY99, he says.

After the deal closes, Merchant of Vino founders Edward and Juliette will consult to Whole Foods. Their son Marc, currently president of the specialty chain, will become Whole Foods’ national wine buyer. Daughter Monica will continue to manage one of the Merchant locations; and son Matthew, who heads operations, is also slated to join Whole Foods’ management team.

Whole Foods reported sales for FY97 ended Sept. 27 at $1.12 billion, up 21% over sales of $940.5 million in FY96. WFMI operates 76 stores in 17 states and the District of Columbia.