Dive Brief:
- Activist investor Jana Partners has added Celeste Clark, Kellogg’s former chief sustainability officer, to a lineup of names that could be put forth for election to Whole Foods’ board at next year’s shareholder meeting, according to Supermarket News.
- Clark joins three other retail veterans who have signed nominee agreements with Jana. They include Glenn Murphy, former CEO of Gap Inc.; Tad Dickson, former CEO of Harris Teeter; and Meredith Adler, a former grocery industry analyst.
- In response to pressure from Jana and other investors, Whole Foods earlier this month added five new members to its board of directors, including Sharon McCollam, former CFO with Best Buy; and Ron Shaich, founder and former CEO of Panera.
Dive Insight:
After Jana and Neuberger Berman turned up the pressure on Whole Foods, the natural and organic retailer quickly announced a refresh of its board of directors and added a new CFO. The company signed on some big names that formerly lead top retailers such as Best Buy, Foot Locker and Panera. But according to reports, the new additions didn’t include enough grocery industry experience to satisfy Jana.
The appointment of former Kellogg’s executive Celeste Clark seems to be Jana’s bid to increase that food retail expertise. Already, the firm has put forth a one-time industry analyst and the former CEO of Harris Teeter. The announcement also seems to be turning up the heat on Whole Foods by adding another potential board member loyal to Jana’s cause.
For the embattled Austin, Texas-based retailer, the message is clear: Improve financial performance, or else. During its most recent earnings call, Whole Foods’ CEO John Mackey announced the company would speed up its turnaround plan, which includes cutting internal costs by another $300 million, centralizing purchasing, increasing targeted promotions, and bringing down prices. Industry observers say this strategy is on target, but they question whether it will improve results quickly enough to satisfy investors.
Analysts interviewed by Food Dive agree Whole Foods doesn’t want to sell, and its turnaround strategy may have staved off pressure from Jana in the short term. But if the company doesn’t measurably improve by next year, it could face a further shakeup of its board. If the retailer continues to slump after that point, a sale may be all but unavoidable.
