It's Official. Woolworths Ltd Has Purchased Macro Wholefoods, the pair will announce the sale on Friday 13th Feb 2009.
By Marcus Dangerfield
Earlier this year we ran the piece below, we are getting closer to confirming that Macro Wholefoods is in it's final stages of negotiation with Woolworth Limited. We understand from sources that there are two sticking points 1) price (ouch) Woolies reckons the 8 stores + one cafe are worth about $15-17 million, the current owners reckon between $30-40 million would recoupe some of the money they've pumped into the business. 2) Woolworths is not happy with some of the property deals Macro has undertaken. Our source reckons that Woolies drives a hard bargain when it comes to paying rent, some of the rental deals Macro has struck in the past are a bit Landlord happy for the conglomerates liking.
Macro has had a chequered past, much of the confusion & myth surrounding the company has come from it's pinnacle. Cody had every intention of making wholefoods big business and said in 2006, "if I haven't opened another 30 to 40 stores in the next few years, I will consider the venture a failure. Our growth plan involves turning supermarkets into ‘wellness centres' that also offer yoga, pilates, hypnotherapy and acupuncture " The other side of the confusion has been Cody's distaste for research, preferring to rely on anecdotal fictions created by (an amalgam of ego & self perception) his own point of view. “We've benefited from the reams of commentary about the ‘inexorable rise of the eco shopper' along with the fact that is the Macro space is ‘so sexy', many others are doing the research for me” says Cody. mcsixtyfive believes this has contributed to the confusion over the chains actual worth. If your trying to sell a brand & your it's biggest fan your view is skewed?
Update to follow: 070209
post script: (the source mentioned below is not an ex Macro employee)
Rumors abound that the wholesome chain of not-for-profit supermarkets is about to clinch a deal/sale. G (our source) (G: a senior exec with Macro) has staffers at Macros Alexandria HQ palpitating between excitement & apprehension with his rumors of an immanent sale.
(G has had this rumor going for about 6 months now)
Though G is not the most reliable source, he has been eluding to a sale for several months now (citing both big grocery moguls as the buyer on separate occasions) while we are unable to confirm through either Woolies or Wesfarmers that there is a bid out there, we suspect there is an element of truth to the G rumor.
Surely neither of the Grocery Moguls are considering purchasing a business that has failed to turn a profit in 6 years, call us thick (in the current economic climate acquisitions surely need to be based on adding either capital or value, debt is not a positive word right now)
So why would you purchase a great looking expensive to run organic food chain with a patchy history of hit & miss ideas, ethics and non profitability.
Woolies has a great reason: The Duck (Woolies attempt at specialist organic retailing) At a guess though, snapping up Macro would make perfect sense, why roll out a multitude of untested theories when you can snap up someone else's footwork.
GJ Coles can hardly afford any new debt? George Coles would turn in his grave at the thought of paying large amounts of hard earned simply for a name. Wesfarmers on the other hand needs to get into what was a growth area.
In 2005 Mr Cody was quoted as believing that Macro was worth in excess of $40 million, fingers crossed boys.