Stocks in Whole Foods Market soared after a new year’s revelation that should also lift spirits at the embattled natural foods retailer.
Los Angeles billionaire Ronald Burkle announced that he had bought a seven percent stake in Whole Foods over the past few months, news that saw the share price rise almost 23 percent to $12.27.
Burkle, who also bought a similar stake in Barnes & Noble book chain via his Yucaipa Co investment arm, believes shares in the United States’ leading organic retailer have been undervalued
Filing with the Securities and Exchange Commission, Burkle said “there are substantial opportunities for the company to improve operations and its pricing image while maintaining its high-quality product offering”.
Sometimes nicknamed Whole Paycheck for the perception that the chain is overpriced and therefore only for those with high disposable income, Whole Foods has certainly been feeling the pinch as the American recession bites deeper.
Shares dropped more than 75 percent in 2008 and net income fell $1.5 million to the quarter ended September 28, down from $34 million in the same period a year earlier.
The Austin-based company has also been embroiled in expensive legal battles with the Federal Trade Commission over its acquisition of rival Wild Oats.
