Two years following going through the eye of the needle, Le Pain Quotidien is once once more opening stores all over the world, says its CEO Annick Van Overstraeten. An expansion that only passes through franchisees.
The office ofAnnick Van Overstraeten looks like a restaurant The Daily Bread: a teak table serves as a desk and the coffee is served to us in the typical bowls of the chain of bakeries of which she has been CEO for two years already. On the table, no menu card, but three thick files entitled “Tartine Connection”. They contain the business plan that the boss generously annotated by hand. Throughout our interview, Annick Van Overstraeten will leaf through it many times to find more detailed information. We were expecting her to invite us down one floor, to the restaurant on the Brussels office site, Tour & Taxis. “This restaurant remains closed,” she said. “The covid crisis has transformed the world. Chinese tourists have not yet returned and teleworking has become commonplace. It is also for this reason that we are forced to permanently close our London restaurant in the business district. Canary Wharf which was very successful before the crisis.”
During the pandemic, the chain had to close its 265 stores in 15 countries.
The pandemic placed Le Pain Quotidien in a difficult economic situation in 2020. At the time, the chain had to close its 265 stores in 15 countries for a time: from Mexico to the United States and from Japan to Brazil. The resulting collapse in turnover led the company to seek legal reorganization. As part of this operation, the owner Cobepa bought the bank debts and the M80 Capital fund came on board as a co-shareholder. The American stores and part of the British stores were sold to independent operators. The number of stores has thus fallen from 160 to 60. Owned establishments still represent a third of turnover gross – 260 million euros expected in 2022 – compared to two thirds previously.
Annick Van Overstraeten relies on independent operators to put Le Pain Quotidien back on the path to growth. “You have to keep a certain number of own stores to feel the market, but to grow sustainably it is better to work with partners. They know the local market better.” Added to this are other advantages that she does not mention: by relying on franchisees, Le Pain Quotidien has to invest less and the operating costs of the establishments are also lower. The other side of the coin is that the chain receives only a small part of the turnover of the stores concerned.
One of the main partners of the Belgian chain is the American restaurant operator Aurify, which bought the Pain Quotidien stores in the country of Uncle Sam and which has since opened a dozen others. And other openings are planned: in the next semester, restaurants will be launched for the first time in Greece, Morocco, Luxembourg, Uruguay and Saudi Arabia. In total, the number of stores will increase by 15 by next summer.
Not dry bread
However, the chain is not reduced to the diet of dry bread. “Granted, those two years have been excruciating. And it goes without saying that we have suffered losses”, underlines Annick Van Overstraeten without wanting to specify their extent. But, following the covid crisis, another very delicate period is coming, in the form of galloping inflation.
“Hospitality entrepreneurs who say their business is doing well can come and explain to me what they mean by that.”
“Oui, we fear a difficult autumn, especially in Europe. The situation worries me, even though I am by nature an anxious soul. Horeca entrepreneurs who say that their business is doing well can come and explain to me what they mean by this when the prices of raw materials are constantly fluctuating and labor costs are rising. But I am confident that our first restructuring measures will enable us to close the year 2022 without operational losses.” And while she assures us, she grabs the table with both hands and tells us: “knock on wood!”
Same beneficiarythe current financial year will not be likely to delight shareholders, recognizes the CEO. The objectives that the management and the owners had set two years ago have been repeatedly “corrected and adapted”, in the words of the CEO. “It might not be otherwise, given the situation. Fortunately, our shareholder Cobepa has known the company for several years. And the managers of M80 also have operational experience in the sector. They understand the problems.”
We are growing and, despite the difficult situation, we have not needed any additional capital.”
In any case, she asks patience so that Le Pain Quotidien once once more becomes a sustainably profitable company. “There are no miracles. We are not in the tech business, but in the consumer market. Building a brand there takes a lot of time and energy. But we are growing and, despite the hard situation, we did not need additional capital.“
Closures
To definitively put Le Pain Quotidien back on track, the chain will not just open new stores.
“There are still three or four establishments that we want to close. But, for the time being, a large wave of closures is not planned.”
“We will also have to close some from time to time. This is part of the normal management of a company”, underlines Annick Van Overstraeten. “Neighborhoods that were in vogue for a while can lose their attractiveness. We have to react to this. So, there are still three or four establishments that we want to close. But, for the time being, a large wave of closures is not expected”she said once more, grabbing the wooden table.
It highlights the work already accomplished. “We launched the restructuring to restore order in the company, both in digital transformation, with e-commerce, and in the evolution of the brand and the “look & feel”. Until recently, our brand had 42 different logos. In all our countries, we offer an avocado toast, but it was presented differently everywhere. We have harmonized all of this. From now on, the menu is identical everywhere up to 80%, and it can vary locally in a proportion of 20%. »
The ECO acknowledges that his current job is more difficult than at Lunch Garden, the restaurant chain which returned to profit following the restructuring it carried out there. “But I have fun. Well, maybe that’s a big word: at least, I really like this job. I’ve always wanted to work for Le Pain Quotidien, one of the few Belgian brands to be successful in international. But, I did not expect two years ago to know the turbulent years that we have gone through.”
At the operational level, his current job also differs from that previously carried out with the purely Belgian restaurant chains, Lunch Garden and Quick. When she worked there, she made it a point of honor to visit each establishment at least twice a year, to be as close as possible to the field. “She even goes there on weekends,” said an intimate at the time. “All the workers know her personally, because she takes the time to talk to each one of them. She’s also not afraid to lend a hand in the kitchen or in the dining room.”
This personal investment is no longer possible today. “In the United States, I’ve been there twice since I became CEO,” says Annick Van Overstraeten. “It’s not a lot, but the covid crisis has prevented me from traveling more often. However, I continue to visit restaurants in neighboring countries. In recent months, I have been to Brazil and Dubai. And soon , I will go to Mexico. This international dimension reminds me of the time when I worked for the praline manufacturer Leonidas. I missed her when I was at Quick and Lunch Garden, because I like to travel and come into contact with different cultures. »
The Daily Bread
- Belgian chain of bakeries and restaurants.
- Turnover (2021): 260 million euros.
- Result: undisclosed, but loss-making.
- Stores: 220, of which 60 are owned and 160 in the hands of outside companies and contractors.
- Staff: 4,000 workers.
- Active in 15 and, soon, 20 countries, including Belgium, the Netherlands, France, the United Kingdom, the United States, Mexico, Brazil, Argentina, Japan and Saudi Arabia.
- Owners: Cobepa funds, M80 and management.