Natural-foods grocer’s CEO fights attacks made by investor

Already under the gun to improve business operations, Whole Foods Markets’ founder and CEO finds himself in a new struggle.



The natural-foods grocer’s chief executive John Mackey is in the middle of a battle with activist investor Jana Partners — a hedge fund that upped its stake in Whole Foods to more than 8% in April. The move put Mackey on the defensive, provoking him to refer to the firm as greedy, and comparing them to "Ringwraiths," the villainous characters from the "Lord of the Rings" series, according to Texas Monthly.





In the report, Mackey added, “These guys just want to sell us, because they think they can make 40% or 50% in a short period of time. They're greedy bastards, and they're putting a bunch of propaganda out there, trying to destroy my reputation and the reputation of Whole Foods, because it's in their self-interest to do so."



According to the report, the hedge fund is pushing for major changes at the grocery chain, including a board shakeup and a possible sale of the company. However, Whole Foods has already undergone a significant reorganization.



In May, the natural-foods retailer named a new chairwoman and five new independent directors. It also appointed a former Kohl’s executive as CFO.



“With today’s additions to the board, and changes in our board’s leadership, we are well positioned as we enter the next phase of our evolution,” said John Mackey, co-founder and CEO of Whole Foods. “We believe that we have the right plan – and the right team – to execute on our initiatives at an aggressive pace, deliver results and enhance value for our shareholders.”



However, some shareholders disagree with Mackey’s plight, and instead believe it’s time for a new business model. "This isn’t the rapacious hedge fund versus the conscious capitalist. That's a straw-man argument. The business is hemorrhaging customers,” an anonymous Whole Foods shareholder said in the report.



In May, the chain reported that its same-store sales fell for the seventh straight quarter, declining 2.8%.



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