Whole Foods taps new CFO, chairman in big board shake-up

Key Points
  • Keith Manbeck was tapped for the Whole Foods chief financial officer post.
  • Gabrielle Sulzberger was named chair.
  • Five new independent directors were named to its board.
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Whole Food Markets on Wednesday announced a big shake-up of its board and named a new CFO as it works to turn around its struggling business, which has seen seven straight quarters of same-store sales declines.

Keith Manbeck was tapped for the chief financial officer post, effective May 17. Most recently, Manbeck was senior vice president of digital finance, strategy management and business transformation at Kohl's.

At the midtier department store, Manbeck helped lead key initiatives, including the development of Kohl's e-commerce business.

Manbeck succeeds Glenda Flanagan, who will retire as CFO. Flanagan's plans to retire were announced last November; she will remain a senior advisor to the company.

Meanwhile, the grocer also named five new independent directors to its board, effective immediately, and tapped Gabrielle Sulzberger as its chair. Sulzberger has been on Whole Foods' board since December 2016.

The five new directors are Ken Hicks, chairman, president and CEO of Foot Locker; Joe Mansueto, founder and executive chairman of Morningstar; Sharon McCollam, former executive vice president, chief administrative and chief financial officer of Best Buy; Scott Powers, who has held various positions at State Street; and Ron Shaich, founder, chairman and chief executive of Panera Bread.

The five new directors replace five members who have resigned from the board: John B. Elstrott, the former board chairman, and Morris Siegel, Jonathan Sokoloff, Ralph Sorenson and William Tindell.

The management changes come as Whole Foods faces scrutiny from activist investors, Jana Partners and Neuberger Berman, who are pushing the supermarket chain to accelerate its turnaround or put itself up for sale.

Neither Jana nor Neuberger were immediately available to comment on the changes.

The company's fiscal second-quarter earnings, which also were reported Wednesday, showed sales continued to decline, even though earnings met Wall Street's expectations.

Whole Foods shares rose 2 percent after the market's close.

Whole Foods beats Street, names new CFO

This is the second governance change Whole Foods has made since the activists took a stake in the company. Previously, the grocer implemented a new board succession plan that was more in line with policies adopted by other companies. The grocery chain put a 15-year limit on the service tenure of new board members and added Google exec Mary Ellen Coe to the board. Coe was the first new appointee added to the board since 2008.

With Wednesday's changes, Coe was named chair of the nominating and governance committee.

The new directors have deep backgrounds in both retail in and in corporate turnarounds, while the new CFO brings much-needed e-commerce experience.

Whole Foods is operating in an increasingly competitive environment, with pressure from both conventional supermarkets such as Wal-Mart Stores and smaller chains such as Sprouts Farmers Market, which have focused on a strategy of lower pricing.

Whole Foods has tried to compete with its 365 chain, which features smaller stores and value pricing. It also has slowed its store expansion.

Grocery stores also are trying to grab more sales online. While shoppers are increasingly buying more goods over the internet, they have been a bit more hesitant to do their food shopping there. Still, traditional competitors as well as Amazon and other start-ups have been investing heavily in anticipation of greater adoption. If Whole Foods remains an independent company, it will need to devise a digital strategy.

Recently, there has been speculation that Albertsons could be a suitor for Whole Foods. That report, in the Financial Times, also indicated that Whole Foods had hired Evercore as an advisor.

— CNBC's Jeff Daniels contributed to this report.