Panera Bread is reuniting with Au Bon Pain by buying the smaller bakery chain and naming a new CEO, major changes that come four months after Panera was acquired and taken private by investment firm JAB.
Au Bon Pain and Panera were part of the same company until 1999. Now Panera, which was sold to JAB for $7.2 billion in July, wants Au Bon Pain's business-driven locations to help drive its own business. It's the latest deal at JAB, which has been steadily growing an empire of coffee-and-bakery chains that by now also includes the likes of Krispy Kreme, Caribou Coffee, and Peet's.
Speculation had been growing recently that JAB might look to buy Dunkin' Donuts to keep adding to its coffee-driven lineup. Once news of the Au Bon Pain takeover was announced Wednesday afternoon, shares of Dunkin's parent, Dunkin' Brands, fell more than 4 percent.
Panera says it wants to use Boston-based Au Bon Pain and its 304 units to look for growth in different kinds of real estate than where Panera has traditionally been, including hospitals, universities, transportation centers and urban locations. Financial terms of the deal, set to close by the end of the year, weren't shared.
"Since Au Bon Pain typically is in smaller footprints, Panera Bread, on the whole, can better capture the needs of consumers who are on-the-go, rather than looking for a sit-down experience," said Marie Chan, a partner at Vivaldi, a brand strategy consulting firm.
A long history
Ron Shaich and his late partner Louis Kane formed Au Bon Pain Co. Inc. in 1981, and in 1993 Au Bon Pain acquired Saint Louis Bread Company. In 1999, the company was renamed Panera in Shaich's push for national growth, and that's when it sold off Au Bon Pain to focus solely on the future of Panera.
Shaich has continued to be a voice for the company since it was acquired by JAB. In September, for example, he appeared in a video promoting Panera's kids' menu options with a publicity-stunt plea to get the CEOs of major burger chains to eat off of their own kids' menus for a week.
Shaich, who is staying on as Panera's chairman of the board, will be a significant investor in the company and plans to split his time between Panera, initiatives for JAB, and his personal investments and interests, Panera said. He'll also continue to work on strategy, communications and acquisitions, the company said.
Shaich, in a statement, said it's the right time to step down as CEO after returning in 2011 to help the company speed up its growth. He added that Panera was the best performing restaurant stock from July 18, 1997, to July 18, 2017, when it was sold to JAB.
And in a somewhat muted dig at the Wall Street process of meeting quarterly numbers and the political climate, Panera said Shaich "will also pursue investments and causes important to him, with particular focus on working to reduce the pervasive short-term thinking in our capital markets and national debate."
Panera has roughly 2,050 locations under the names Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Cafe, with about $5 billion in annual systemwide sales.