Wild Oats Founders Resign from Board of Directors

BOULDER, Colo.--Wild Oats Markets Inc. announced that Michael Gilliland and his wife, Elizabeth Cook, resigned from the company's board of directors on Dec. 6 to pursue outside interests and diversify their investment portfolio. The couple founded the natural foods company in 1987, with their first store located here.

In recent years, Gilliland and his wife had limited their day-to-day involvement with the company (www.wildoats.com). In mid-2001, Gilliland stepped down as chief executive officer (CEO), and Cook left her position as executive vice president. "We are pleased with the new management and the progress they have made in improving the financial performance of the company," Gilliland said in the announcement about resigning from the board. "While we regret that other time commitments prevent our continued involvement, we believe Wild Oats is well-positioned to maximize the growth potential of this industry going forward."

Perry Odak, who joined Wild Oats in March 2001 as president, CEO and a member of the board, wished the couple well in their future endeavors. "Mike Gilliland and Libby Cook built this company on a vision that has led to significant success over the years, and we thank them for their service as leaders of this company and members of the board."

While Wild Oats is transitioning to a new business strategy, there will likely be some impact from increased advertising costs and in-store execution, according to Scott Van Winkle, CFA and vice president of Adams, Harkness & Hill (www.ahh.com), an investment bank based in San Francisco. "Better sales come at a cost, and that cost is seen as an investment in the business," he stated.

"When the company hired Perry Odak, it was kind of expected that [Gilliland and Cook] were going to step down eventually," he added. In addition to the changes on the board, the company still plans to make changes in operations, including closing several stores in 2002. "Whenever you do a turnaround, you find real estate you don't like." He added that the organic foods category continues to do well during these troubled times. "I think organic foods provide a level of perceived security."

In the November report on the company's third quarter (3Q01) ended Sept. 29, net sales rose 7.2 percent to $222.2 million, the company experienced a net loss of $2.9 million. According to a company spokesperson, the couple owned 11 percent of the company's stock and, with Gilliland and Cook no longer being on the board, the couple can now sell the shares. However, they will still have a financial link to the company: in early fiscal 2001, the husband and wife team loaned $2.0 million to the company, which bears an interest rate of 9.0 percent and is payable on demand.