Wild Oats says early next year

Tuesday, July 30, 2002

COLUMN: Edward D. Murphy

This time, they really, really mean it: Wild Oats will open its much-anticipated/widely feared store on Marginal Way early next year.

Interior construction, which has been delayed while the Boulder, Colo.-based chain focused on straightening out its management and finances, began last week and will take five to six months to complete, said Sonja Tuitele, the spokeswoman for the chain.

Wild Oats sells natural, organic and environmentally friendly foods in 116 stores located in 23 states and one Canadian province. It was an investor's darling for a short time before falling prey to overly rapid expansion, management disarray and a string of quarterly losses.

Since reporting its first quarterly profit in more than a year this spring, it has returned to favor and has essentially held its own on Wall Street for the past few months, no small feat these days.

"It's too early to say the turnaround has happened, but it seems that everything is working well," Tuitele said.

Wild Oats' arrival in Portland has been repeatedly pushed back. Many are eagerly anticipating the store's opening because the chain brings an element of comforting order to the often chaotic world of natural foods. On the other hand, many in the natural food community in Greater Portland revile Wild Oats for having the audacity to move next to the locally grown Whole Grocer.

The move provoked the same sort of reaction that Wal-Mart gets when it puts a superstore next to a favorite mom-and-pop establishment.

The owner of Whole Grocer has vowed to stay put and fight, but she hasn't had anyone to fight while the Wild Oats store has sat empty, awaiting completion.

Tuitele said the chain put a handful of new stores, including Portland, on hold while it sorted things out in Boulder. One of the changes made was to store layouts, which in Portland means Wild Oats will sublease about 8,000 square feet of the 35,000-square-foot store it had built on Marginal Way.

Tuitele said the chain hasn't been actively looking for a tenant in its Portland store because the opening has been in flux. Now that it's somewhat nailed down - although Tuitele said there's no firm date yet - that effort can begin in earnest. She said the space is typically subleased to a compatible user, such as a spa or yoga studio, although Tuitele said the Portland space may not be large enough for the latter.

The new layouts put a greater emphasis on fresh produce and also include a "store-within-a-store" for selling bath and body products, she said. The design has been a hit at the prototype in Long Beach, Calif., she said.

The store holds promise, Tuitele said, because it's designed more along the lines of a mainstream grocery store and that boosts sales from those who might go out of curiosity or just for a few natural food items.

"We've attracted more people to the stores and have kept them there and we're now seeing more sales of our grocery items," she said.

The company is also becoming more aggressive with marketing, which features more frequent advertising. The net result, she said, means Wild Oats will soon return to the fast-growth mode it was in a couple of years ago.

In addition to the renewed effort to open long-delayed stores - Portland, Lexington, Ky., and Costa Mesa, Calif., are at the top of the list - Wild Oats plans to open 10 others next year. In 2004, it hopes to add 20 new stores and then 25 in 2005.

Those plans are dependent on financing, and Tuitele said the company is looking for an investor to step up with between $30 million and $40 million. She said, however, that the opening of the Portland store is not riding on the success of the search for more money.

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at: emurphy@pressherald.com

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