Whole Foods Gives Into Investor Pressure and Restructures Board (WFM)

Whole Foods (NASDAQ: WFM ) may be known as the grocery store that costs 2-weeks pay every time you shop, but that doesn’t mean the company is doing well in this very unstable time. Indeed, with more and more consumers demanding affordable food—of the fresh variety—discount grocers and traditional chains alike have risen to answer the call and push specialty retailers—and their much higher prices—to the outskirts of the market.

Such appears to be the case with Whole Foods (NASDAQ: WFM ). According to a recent statement, the company has seen sales in a continuous decline for the last seven straight quarters. As such, the company is feeling pressure from activist Jana Partners, a group which disclosed its stake in the grocery chain last month, requesting for a senior management shake-up in the process.

On that note, Whole Foods’ newly-appointed chair board, Gabby Sulzberger, said on Wednesday that the company has made an offer to appoint two of Jana’s nominees to the grocery chain’s board in exchange for a new agreement which would allow for the company to focus on its present improvement plan.

Jana declined.

With that, then, Keith Manbeck—who already serves as the senior vice president of digital finance, strategy management, and business transformation for Kohls’—will begin a new role as chief financial officer for Whole Foods, on May 17.

“We understand we need to do much more and faster. Our competitors are not standing still. We need to ensure our company remains a leader in this fast-growing sector,” CEO John Mackey testified in an earnings call. “We are the premier brand in the one area seeing growth – natural and organic.” He also added, “With today’s additions to the board, and changes in our board’s leadership, we are well positioned as we enter the next phase of our evolution.”

Regarding Manbeck’s incumbency, the Whole Foods co-founder continued, “Keith has a track record of success at leading retail companies, including Kohl’s and Nike, where he led key transformation initiatives with great results. He is a proven leader who knows how to drive strategic change, while maintaining the culture and values that make a company great.”

Finally, Mackey noted, “Today’s announcement is a powerful combination of accelerated initiatives and new cost savings with clear timelines to deliver. We are on a path to return to positive comparable store sales and earnings growth next year.”

And it appears the market likes this move: shares of Whole Foods—which closed Thursday down 0.88 percent improves in after market trading, resting up more than 2 percent by evening.

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