BOULDER, CO-The Wild Oats Markets chain will close all five of its Henry’s Farmers Market stores in Arizona and three additional Wild Oats stores in other markets, effective Dec. 16. In announcing the closings Tuesday, the chain also said that it will not open a Henry’s store under development in the Phoenix market and that it will take an asset impairment charge in the fourth quarter for two underperforming Wild Oats stores in other markets. Also, it will close one of those Wild Oats stores when its lease expires in 2007.

Wild Oats, which reported net income of $3.1 million for the recently ended third quarter compared with only $82,000 in the third quarter last year, said that the closings are the result of “an extensive financial review” of its store portfolio. The Henry’s closings will include all of those stores in and around the Phoenix area, including two stores in Gilbert and one each in Glendale, Peoria and Phoenix. The two Wild Oats stores in the Phoenix area, on Camelback Road and in Scottsdale, will remain open, and the Wild Oats brand “will be the company’s focus for future growth in the Phoenix market,” the company said.

The Wild Oats stores in other locations that will be closed on Dec. 16 will be at Village Pointe Center in Omaha, NE; Fort Collins, CO and West Jordan, UT.Wild Oats said that it anticipates “significant savings” from the store closings and will invest the savings in the company’s existing store base. The closings will nonetheless flow toward company’s bottom line, resulting in approximately $25.5 million in restructuring charges in the fourth quarter, plus operational costs of approximately $1.7 million.

The company will now focus Henry’s growth in Southern California. Wild Oats Chairman and Chief Executive Officer Gregory Mays described Henry’s as “a very compelling chain that fills a unique niche in the Southern California specialty foods market.” By contrast, he said, “We believe that the Phoenix stores were not performing at Henry’s typically strong levels because of the fiercely competitive nature of the Phoenix food retail market, and the fact that Henry’s was a new entrant to Phoenix two years ago. Therefore, we have very little brand awareness in a crowded market.”

Mays said that the focus at Wild Oats now will be “to grow sales in existing stores while using our improved real estate model to select high-potential sites for new stores, like those opened so far in 2006.” Thus far in the fourth quarter, the company has opened two Henry’s stores in Southern California and will open two more before the end of the year. It has 19 leases or letters of intent signed for new Wild Oats and Henry’s stores scheduled to open in the fourth quarter of this year, in 2007 and into 2008.

Wild Oats operates 115 natural foods stores in 24 states and British Columbia, Canada. The company’s brands include Wild Oats Natural Marketplace, Henry’s Farmers Market, Sun Harvest and Capers Community Markets.

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