Panera Bread to acquire 23 bakery-cafes

By Lorraine Heller

- Last updated on GMT

Related tags Panera bread Market Bread

Panera Bread is to buy 21 franchise bakery-cafes from Knead Bread
for $27.5m in cash, the company announced yesterday.

The deal includes two more bakery-cafes currently under construction as well as the development rights for certain markets in Indiana, Panera said in a statement. The transaction, which is subject to customary closing conditions, is due to be completed on or around November 1 2005. The company does not expect the cafes to generate any significant earnings until the second half of the 2006 financial year. The US based bakery franchise recently reported a 7.8 per cent increase in system-wide comparable bakery-cafe sales in the four weeks to September 6 2005, but it predicts this figure will fall to 4 per cent in the third quarter as a result of high costs. Panera had said it expected to open only 28 new cafes in the third quarter this year, falling short of its initial target of 41. However, the company said this would be made up for in the fourth quarter, resulting in increased costs during that period. It also expects to have market research expenses of $2m during the fourth quarter, placing even more pressure on operating margins. External links to companies or organisations mentioned in thisstory: Panera Bread

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