Wednesday, May 14, 2008

Wild Oats Rent Does Not Stop

Whole Foods announced its fiscal second quarter earnings yesterday. The acquisition and integration costs of Wild Oats are still eating into Whole Foods' earnings. Wild Oats home office at Boulder is still a big part of the expenses, at $4.3 million. Whole Foods has been reducing staff in the Boulder office, it reported 27 employees at the end of second quarter (April 13th) and a current number of 5 employees and expect this to drop to 0 by the end of third quarter.

Even when the labor charges drop, their 8-K says rent payments do not stop yet. The rent payments are $2-$3 million per quarter and they do not indicate how long this would continue.

An interesting calculation is to see how much Whole Foods accounted for the staff . Assuming the higher end of their rent, $3 million, they spent $1.3 million on 27 employees.

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