Faced with a “very weak” market for a share offering, Edmonton-based retailer Planet Organic has dropped its plan to buy its way into California’s lucrative organic food market.
The company, which already runs 20 natural food supermarkets in Canada and the eastern U.S., said in a release Wednesday that its board has voted to focus its “aggressive” growth plans on its existing divisions, rather than on acquisitions.
Planet Organic in April had announced an offering of common shares to finance its purchase of New Leaf Community Markets, an organic food retailer with five outlets in California’s Santa Cruz area, south of San Jose.
Read Also
China seeks improved ties with Canada amid rising trade tensions
China called on Friday for steps to improve bilateral ties with Canada, saying there were no deep-seated conflicts of interest, following a spike in trade tensions with many of Beijing’s Western trade partners this year.
However, the company said Wednesday, that public offering “met very weak public market conditions” and thus “could not be completed at a price that appropriately valued the company’s internal growth opportunities.”
Thus, Planet Organic abandoned both the public market financing and the New Leaf deal, but emphasized that its decision won’t affect its business relationship or future dealings with New Leaf.
“Pausing and focusing on existing operations for a while is always a good step since it allows us to work on integrating and improving what we already have,” Planet Organic vice-president Darren Krissie said in the company’s release.
That said, the company — which is already publicly traded on the TSX Venture Exchange — noted it will also seek “alternative” growth financing.
Planet Organic runs nine organic food markets in Edmonton, Calgary, Vancouver, Victoria, Halifax and the Toronto area and said Wednesday that it recently signed a lease for a third store in Ontario. Its 11 U.S. stores, under the Mrs. Green’s Natural Markets banner, are in New York and Connecticut.
The company also runs 48 natural health outlets under the Sangster’s Health Centre banner and eight others under the Healthy’s and Planet Organic Living banners. (The Healthy’s stores are now being rebranded as Planet Organic Living.) It also owns Penticton, B.C.-based natural supplements manufacturer Trophic Canada.
