BJ's Wholesale receives buyout bid from part-owner of Whole Foods

Private equity firms Leonard Green & Associates and CVC Capital Partners have made a buyout offer to BJ's Wholesale, a club store valued at $2.7 billion.


Westborough, Massachusetts-based club retailer BJ’s Wholesale announced Friday that it had received a buyout offer from private equity firm Leonard Green & Partners. Los Angeles-based Leonard Green, which handles $9 billion in equity, made an initial investment in the wholesaler last year. The equity firm partnered with CVC Capital Partners to make the offer to BJ’s, which is valued at $2.7 billion.

Leonard Green has already made waves in retail, most notably in 2008 when it made a $425 million investment in Whole Foods Market, for a 17% stake and two seats on the board. The company also has its hand in Petco, Rite Aid and, most recently, California-based 99 Cents Only Stores.

NBJ Bottom Line

Leonard Green made its Whole Foods investment at a time when the economy seemed poised to batter the natural products industry. But if any investment’s paid dividends through the Great Recession, it’s an investment in Whole Foods. Case in point, the Austin retailer has won Nutrition Business Journal’s Stock Award for two years running.

Perhaps a similar payoff awaits for BJ’s? Margins are certainly slimmer—the wholesaler is purportedly the cheapest discount store in the United States—but food products have remained profitable through the last few quarters.

From a nutrition industry perspective, club remains a healthy outlet for supplements. NBJ has U.S. club sales of supplements at $1.6 billion in 2010, with growth of 5% over 2009 sales. BJ’s is a great fit for discount brands.

NBJ will publish a complete breakout of 2010 U.S. supplement sales, including growth figures, category breakouts and channel particulars, for its annual Nutrition Industry Overview double issue, which prints in July. To order a copy or become a subscriber, please visit the NBJ subscription page.

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