Whole Foods Files Suit Against FTC
Washington, D.C. Whole Foods Market filed a federal lawsuit Monday against the Federal Trade Commission (FTC), claiming the regulator violated its due process rights in a dispute over its acquisition of rival Wild Oats.
Whole Foods bought rival Wild Oats Markets Inc. in 2007 for $565 million. But the FTC’s antitrust challenge has left the acquisition in legal limbo ever since.
The FTC worried the deal would create a natural-food monopoly, but federal judges ruled the acquisition could move forward. An appeals-court decision threw it back into question.
The commission is to conduct an administrative trial in the case in February that is supposed to be impartial. However, Whole Foods said in a lawsuit filed in U.S. District Court for the District of Columbia on Monday that the FTC’s proceeding is hopelessly biased and the agency has prejudged the case.
Whole Foods argues that the commission also violated the company’s due process rights by setting a rapid schedule for the administrative proceedings that does not allow Whole Foods adequate time to prepare its defense.
“The violations of Whole Foods Market’s due process rights here are stark and, therefore, hurt the FTC’s credibility,” said Lanny J. Davis, attorney for Whole Foods Market, who signed the complaint. “Even more so does the FTC’s insistence on hearing this case rather than allowing an objective federal court to hear it.”
Whole Foods wants the court to require the FTC to terminate the proceedings. The company wants the case to be resolved in federal court instead.
Ex-office supply executive taking new venture to the Max
Former OfficeMax chairman and ceo Michael Feuer and Jared Florian, founder and chairman of Universal Screen Arts, a catalog and Internet company specializing in gifts, home decor, books and senior healthcare products, plan to launch a new retail concept focused on health care next year called Max-Wellness.
Feuer and Florian expect the first units to open early next year in Cleveland and in Fort Myers and Naples, Fla. Their vision for Max-Wellness is to create a national chain that provides products and services that help aging Baby Boomers live well and stay well.
“You’ve never seen anything like it before, because there has never been anything like it before,” proclaims a Max-Wellness brochure.
The concept is positioned as a destination for all things health and wellness related, and stores will reportedly range in size from 6,000 square feet to 10,000 square feet, and will offer between 30,000 and 40,000 items. Some will include pharmacies and the merchandise assortment will consist of supplements, sports nutrition, vitamins, health and beauty care products, personal healthcare items, homeopathic products and self care items.
After the first units launch, a national rollout will commence in 2010 with the addition of 10 to 15 stores, followed by 30 to 50 units in subsequent years.
Initial funding will come from Feuer and Florian, neither of whom has experience in the health care field, a fact that actually could work in their favor as they look to reinvent the retail healthcare experience from a clean sheet of paper. Feuer’s lack of experience in the office products business didn’t stop him from founding OfficeMax in 1988 and building the company into a nearly 1,000-store chain with annual sales of approximately $5 billion. He left the company in 2003 after engineering its sale to Boise Cascade in a deal valued at $1.5 billion.
It remains to be seen whether Max-Wellness can find a customer base and achieve profitable sales and a growth trajectory comparable to that of OfficeMax. However, as was the case with the office products space in the late 1980s when OfficeMax was founded, the market for healthcare products and services is fragmented and poised for growth due to the affluent Baby Boom generation’s desire to live well and stay well.
“Max-Wellness will add drama, theater, organization and education information to the in-store, online and catalog equation, bringing products to life by translating what they are into how they can provide a solution,” stated the company.
Stores will be staffed by professionally-dressed and trained personnel, who will provide answers to consumers’ healthcare questions. “This will not be achieved by guesswork, but instead by utilizing technology put at the fingertips of every Max-Wellness associate to access healthcare solutions,” stated the company. “This will create an environment where Max-Wellness will quickly be established and recognized as the go-to store for better living.”
Alion roars in New York City, and that’s no yarn
NEW YORK —Lion Brand, a leading supplier of knitting and crochet yarn to retailers such as Walmart, Jo-Ann Fabric and Craft and Michaels, has opened a unique, stand-alone concept in New York City. Part store, part learning center, the Lion Brand Yarn Studio, which opened to the public on Nov. 18 in Manhattan’s Union Square neighborhood, provides both consumers and retailers the opportunity to get a closer look at Lion Brand’s products.
More like an art museum than a store, the Lion Brand Studio showcases its products in displays designed to highlight the variety of yarns. The Studio even has a special display solely for organic and natural yarns, emphasizing Lion Brand’s commitment to sustainable products.
Lion Brand also gives special attention to its Vanna’s Choice brand, showcasing its strong partnership with Vanna White, with in-store displays of her yarns and books on her involvement with knitting and crocheting.
Both experts and novices are welcomed at the 19,000-square-foot store. A “tasting gallery” at the front of the studio offers a sampling of a selection of yarns on cones, where visitors can pull off a swatch of yarn to test. Customers who want to know more about a particular yarn can bring it over to the “learning bar,” where Studio staff offer assistance with knit and crochet projects.
Visitors looking for further instruction can sign up for one of the Studio’s classes. Beginning Dec. 15, Lion Brand will offer classes for up to 10 students at the beginner level and up to eight for more advanced students.
Customers also have access to Lion Brand’s Web site via two in-studio computers. The site features almost 2,000 free patterns for use.
“This is not just a store, but a center of inspiration, education and service for those who knit or crochet—whether they are experienced or hoping to learn,” said Lion Brand Yarn president David Blumenthal. “Our entire team of associates will be on call for Studio customers to express their creativity and enjoy creating their projects.”
Blumenthal noted during a store visit by Retailing Today, that there were no immediate plans to open a similar concept store anywhere else, and that the focus would remain on showing retailers how the brand is growing and educating consumers about its products.