More problems at Wild Oats store

Boulder grocer cites design woes with new flagship

Alicia Wallace, Daily Camera

Thursday, July 19, 2007

BOULDER - The opening of the Wild Oats flagship store at Twenty Ninth Street isn't being delayed because of the company's acquisition by Whole Foods but because of problems with design, construction and operations.

Wild Oats revealed this week in a court filing that it has suspended opening its Twenty Ninth Street store because of "a host of significant" design and operational problems, and not the pending acquisition by rival Whole Foods.

But the Boulder-based natural foods grocer said it still plans to open the 40,000-square-foot location feted as the company's flagship store and prototype for future expansion. It just needs to work out the kinks.

"We're still evaluating how we go to market with this store," said Sonja Tuitele, a Wild Oats spokeswoman. "How do we overcome those challenges and enhance the current design and construction of the store and make it profitable?"

The status of the new Boulder store has become the subject of legal wrangling with the Federal Trade Commission, which has challenged the $671 million deal.

During a deposition last month with the FTC, Wild Oats former CEO Perry Odak testified about the delay of the store's opening but stopped short of giving the reasons why it hadn't opened. He said he agreed to a "joint defense privilege" with Wild Oats attorneys, the FTC said in a Friday filing.

Citing a variety of topics - including Odak's retaining his own attorney and an "antagonistic relationship" between Odak and Wild Oats - the FTC on Friday asked the court in a motion to compel further testimony.

In its rebuttal made Tuesday, as Wild Oats described how the conversations between Odak and its attorneys were privileged, the company also shed further light on its flagship store.

The "opening of the Twenty Ninth Street store was unilaterally delayed and then suspended by Wild Oats due to a host of significant design, construction and operational problems unrelated to the pending transaction," Wild Oats' attorneys said in the filing.

While Wild Oats attorneys noted plans to elaborate on the store's delay Friday, the extent of the problems was not detailed in either of the filings or by the company spokeswoman.

This week, Wild Oats' new store on the southern tip of the Twenty Ninth Street mall sat silent.

Lori Giggey, marketing manager for Twenty Ninth Street, said the mall's operators have not expressed any concern to Wild Oats about the delay.

"Our only communication has been, 'We still plan on opening; we just don't have a date yet,' " she said.

The grand opening was scheduled for March of this year, and more than 150 people were offered jobs. Everything was derailed in February when Whole Foods announced plans to acquire Wild Oats.

Wild Oats subsequently postponed orientation and delayed plans for a grand opening. The company has not specified a new opening date.

A two-day hearing before the FTC on the merger is scheduled July 31.