Phoenix-based Sprouts Farmers Market announced Wednesday it would merge with Henry’s Farmers Market, reuniting two chains founded by the same family. The combined company will have 98 stores with 7000 employees and combined revenues of more than $1 billion.
“This is going to be a large undertaking, but I don’t know of a retailer in the market today with a better, more capable team in their ownership, operations, purchasing, and marketing than the one at Sprouts,” said veteran natural products industry analyst Bill Crawford, director of retail publishing programs for Boulder, Colo.-based New Hope Natural Media. “I expect that the expanded company will do extremely well.”
The Henry’s name will gradually be phased out once the merger is finalized, with existing stores—and a projected 10 new stores in the next year—taking the Sprouts name. Though the merger marks the end of the Henry’s name, it also marks the return of Henry’s founders.
The Henry’s chain grew from a single fruit stand in San Diego in 1943. The Boney family sold the chain to Wild Oats in 1997. When Wild Oats was purchased by Whole Foods in 2007, Whole Foods sold the chain to Smart & Final Holdings, owned by Apollo Global Management, a New York-based leading private equity firm. The Boney family founded Sprouts in 2002, and the chain has since grown to 54 stores. Under the new deal, Apollo will gain a majority stake in Sprouts, while the Boney family will operate all stores.
Both chains have shown strong growth in recent years, gaining customers with their wide selection of organic produce, bulk items and natural meats at low cost.
"The combination of Sprouts and Henry's is an exciting chapter in our family's lives, and we look forward to continuing to deliver on our mission of helping America eat healthier, live longer and spend less,” said Stan Boney, chairman of the board for Sprouts in a release. The company expects the merger to provide efficiencies in purchasing and distribution, improved operations and potentially lower prices for consumers.