Whole Foods CEO Says Amazon Deal Was ‘Love At First Sight’
Whole Foods Market Inc. Chief Executive Officer John Mackey, who agreed to sell the company to Amazon.com Inc. last week, said he was first set up with the e-commerce giant on a “blind date” about six weeks ago and fell in love after conversing for hours.
The deal was set in motion when Mackey and fellow executives Jason Buechel, Ken Meyer and David Lannon flew up to Amazon’s Seattle headquarters, according to a transcript of a town-hall meeting held Friday with employees. Mackey was assured that Whole Foods’ quality standards wouldn’t be compromised, he said.
Whole Foods’ 63-year-old CEO, who has raised eyebrows in the past for his shoot-from-the-hip style, compared his new relationship to a romance. The remarks, released by Whole Foods on Monday, helped shed new light on a deal that was presented Friday with a relatively terse, 5-paragraph statement.
“Mutual friends set us up on a blind date,” he said in the transcript. “It was truly love at first sight.”
As part of its $13.7 billion agreement to buy Whole Foods, Amazon will let Mackey continue to run the company. The deal followed a scrape with activist investor Jana Partners, which had threatened to shake up Whole Foods’ board and overhaul the chain. Mackey had slammed the hedge-fund investors in an interview with Texas Monthly, calling them “greedy bastards” who were only interested in making a quick buck on the sale of the company.
Keeping the Culture?
Despite a recent sales slump, Whole Foods still has a passionate following among foodie shoppers. News of the deal has raised concerns that Amazon will tarnish the grocer by taking it downmarket. But the internet retailer isn’t “stupid enough” to change Whole Foods’ brand, Mackey told employees at Friday’s gathering.
Jeff Wilke, a top executive who leads Amazon’s consumer business, also was at the town hall and echoed the idea that his company doesn’t plan to undercut Whole Foods’ quality standards.
“It would be crazy to change them,” Wilke said.
Amazon has left cultures intact at other companies it purchased. When Amazon bought the video-streaming site Twitch Interactive for about $1 billion in 2014, the deal prompted concerns that the startup would drastically change. Those worries proved to be overblown, although Amazon has begun to add products to the site.
Zappos.com, the shoe-shopping site that Amazon bought in 1999, also has retained its style. Tony Hsieh, best known for implementing a system of self-management dubbed “holocracy,” remains CEO of the business.
Not all acquisitions go so smoothly, though. In March, Amazon announced it would close Diapers.com, Soap.com and other sites it acquired for $545 million in 2011. The company had purchased the sites to eliminate a dogged competitor and prevent the businesses from getting acquired by Wal-Mart Stores Inc.
During the town hall, Mackey repeatedly compared the deal with Amazon to a romantic relationship. At the meetup in Seattle six weeks ago, the executives spoke with Amazon for 2 1/2 hours, Mackey said.
“We could have talked for 10 hours,” he said. “We just had these big grins on our faces, like, ‘These guys are amazing.’”
He said the two companies are now “engaged,” but still need to wait until the transaction gets regulatory approval and is made official. It’s expected to be completed in the second half of the year.
“Like an old traditional marriage, where there are all kinds of rules and chaperones, we can’t consummate the marriage until we’re officially hooked up,” he said. “This is not a Tinder relationship.”
Mackey also said that he had a dream that Whole Foods would merge with Amazon about 18 months ago, presaging the industry-rattling deal.
“Today it’s coming true,” he said. “So dreams are powerful things.”