Eight months ago, as panic gripped Wall Street, billionaire investor Ronald Burkle waited patiently. Then, on Nov. 24, he pounced, buying up hefty stakes in bookseller Barnes & Noble and grocery chain Whole Foods, two brand names the market had severely punished.
The cases were compelling. Whole Foods shares were down 90% from their 2006 high, yet the company had managed to grow its revenue by 40% since then. Still, with consumers humbled by the ailing economy, many believed high-end grocery stores would be left for dead.
Nonetheless, Burkle's bet--that the companies' underlying financials outweighed common-sense notions about how cash-strapped consumers would behave in the short term--paid off. Since late last year, Whole Foods shares are up 85% while Barnes & Noble stock is up 80%. The value of Burkle's $165 million investment (made via his investment outfit, Yucaipa Cos.) has ballooned to $305 million.
Burkle declined to comment for this story.
Profile : Ronald Burkle
Fortune: self made
Country Of Citizenship: United States
Residence: Los Angeles, California, United States, North America
Marital Status: divorced, 3 children
High School, Diploma
Former bag boy founded investment company Yucaipa 1986; made fortune with leveraged buyouts of supermarket chains Fred Meyer, Jurgensen's, Ralph's. Dealmaking ever since. Recent transactions: invested $100 million in Sean (P. Diddy) Combs' Sean John clothing line; sold majority stake in food supplier Golden State Foods to Wetterau Associates, of St. Louis, for $110 million. Also big stake in Pathmark grocery stores. Longtime Democratic fundraiser a close friend of Bill Clinton; former President calls Burkle's 757 private jet "Ron Air."