Le Duff America bullish on Mimi's Café turnaround

Analysts weigh in on the deal

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Some analysts expect Le Duff to close some of the 145 units, which have seen average unit volumes over the past four years fall from $3.3 million to $2.5 million.

“We think Le Duff will maintain the Mimi’s Café brand west of the Rockies, while converting the remaining Mimi’s Café restaurants into La Madeleine restaurants,” wrote Stephen Anderson, senior restaurant analyst at Miller Tabak + Co. LLC., in a note to investors this week.

Anderson added that the $50 million sale price was a deep discount from the $182 million Bob Evans paid to acquire Mimi’s Café in 2004. “We thought BOBE would get somewhere near the original purchase price,” he wrote, “which would have corresponded to a forward EV/EBITDA multiple of 4.5x…so in that regard we view the Mimi’s Café sale as a disappointment.”

Christopher O’Cull, an analyst with KeyBanc Capital Markets, estimated that Bob Evans should receive $70 million to $80 million in net cash during the next three years from the sale of Mimi's, “the lion's share coming from the cash tax benefit.”

While Mimi’s Café struggled as a Bob Evans division, Costner said the casual-dining brand appears “a perfect fit in the LDA portfolio, given the French heritage of the brand. It’s a natural. I can’t imagine anyone of size who does the French food and French legacy better than LDA.”

Le Duff America, a subsidiary of France-based Groupe LeDuff, owns and operates the fast-casual La Madeleine Country French Café and Brioche Doree concepts as well as Bruegger’s Bagels, Timothy’s Coffee and Michel’s Baguette brands in the United States and Canada.

Costner said the addition of a casual-dining brand complemented Le Duff America’s stable of fast-casual concepts. “It takes our expertise into yet another segment,” he said. “It really rounds out our portfolio nicely and fits into our long-term strategic view.

The audience for Mimi’s and Le Duff America’s La Madeleine concepts have similarities, he added. “It plays to a bit more of a mature audience, placing it right in our wheelhouse.”

Costner indicated that Le Duff is bullish on the possibilities for the turnaround of Mimi's. “We have every confidence that we can turn the brand around and bring it back to the prominence that it once enjoyed in the casual-dining segment,” he said.

Bob Evans Farms Inc. owns and operates full-service restaurants in 19 states and has 565 family-dining units exclusive of the Mimi’s brand.

Groupe LeDuff, the parent to Le Duff American, has annual sales of more than $1.53 billion and more than 1,100 restaurants and bakeries.

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless