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New owner revitalizes Leeann Chin with investments in menus, decor

New owner revitalizes Leeann Chin with investments in menus, decor

BLOOMINGTON Minn. Leeann Chin, say officials of the 41-unit fast-casual chain based here. —A face-lift and menu revamp conducted last year are sparking a turnaround for

The nearly 30-year-old chain had contracted and expanded and contracted again over the years under its various leaders. But while Leeann Chin appeared stagnant, it remained a strong brand with a healthy cash flow, said current owner Lorne Goldberg, a former investment banker. —A face-lift and menu revamp conducted last year are sparking a turnaround for

Goldberg purchased Leeann Chin in the fall of 2007. Improving profitability was a matter of paying more attention to the restaurants’ look and feel as well as the taste of the food, he said. A $1 million infusion into decor and menu development has boosted sales, Goldberg said, noting he is now on the lookout for small to midsized chains or underperforming brands to purchase and convert into Leeann Chin units, or its sister concept, Mandarin Express. —A face-lift and menu revamp conducted last year are sparking a turnaround for

“Leeann Chin stores have not struggled; the company struggled in the past because they invested money and time in two different concepts that did not prove successful—the Asian Grill and Chin’s Asia Fresh,” said Goldberg, founder of West Coast Capital in Los Angeles. —A face-lift and menu revamp conducted last year are sparking a turnaround for

Goldberg became a restaurant owner in 2004 when he purchased Mandarin Express, a mall-based food court concept that now has 33 stores in 10 southeastern states, such as Georgia, Florida, North Carolina, Tennessee, Arkansas, Texas, Louisiana and Mississippi. —A face-lift and menu revamp conducted last year are sparking a turnaround for

“I was a former investment banker who was presented with the Mandarin Express as a sell-side assignment,” Goldberg said. “When I looked at the numbers, I was very impressed. I was surprised the cash flow of a food court operation was that strong.” —A face-lift and menu revamp conducted last year are sparking a turnaround for

Goldberg brought in a professional chef to improve the menu and he also updated the concept’s look. The result was a cumulative 23-percent gain in comparable-store sales for 2005, 2006 and 2007, he said. Same-store sales were up slightly, 1.8 percent, in 2008, and have improved 1.5 percent so far in 2009, he added. —A face-lift and menu revamp conducted last year are sparking a turnaround for

Total sales for the mall-based stores are up 10 percent so far this year. Average unit sales for Mandarin Express are $750,000. The average check is $7.50 —A face-lift and menu revamp conducted last year are sparking a turnaround for

The success of Mandarin Express had Goldberg looking for more opportunities when he learned Leeann Chin was for sale. —A face-lift and menu revamp conducted last year are sparking a turnaround for

For years, the force behind Leeann Chin was its founder and namesake, Leeann Chin, a Chinese immigrant who had been a cooking instructor at local community colleges and later a caterer. She sold the chain to General Mills in 1985. General Mills tried unsuccessfully to expand Leeann Chin into new markets, including Chicago. Chin and two private equity companies bought the company back three years later. Later attempts to expand it to Seattle and Kansas City, Mo., did not work. —A face-lift and menu revamp conducted last year are sparking a turnaround for

Chin reportedly had a minority stake in the company when Goldberg bought it. —A face-lift and menu revamp conducted last year are sparking a turnaround for

The company also tried branching out with a full-service concept, Asia Grill, and Chin’s Asia Fresh, a fast-casual concept similar to that of Pei Wei Asian Diner, a 150-unit chain based in Scottsdale, Ariz., and Pick Up Stix, the 125-unit Asian-influenced chain owned by Carlson Restaurants Worldwide Inc. and based in Carrollton, Texas. —A face-lift and menu revamp conducted last year are sparking a turnaround for

“Leeann Chin was a strong brand in the 1990s, but it hasn’t grown or evolved in the last 10 years,” said restaurant consultant Dennis Lombardi of WD Partners in Columbus, Ohio. —A face-lift and menu revamp conducted last year are sparking a turnaround for

Leeann Chin competes on one end with Panda Express, the Rosemead, Calif.-based quick-service chain with about 1,000 units, and the slightly higher-end fast-causal Pei Wei, Lombardi said. —A face-lift and menu revamp conducted last year are sparking a turnaround for

In its hometown market, however, Leeann Chin is a strong player and Goldberg said he has no plans to expand into other states. He has opened 13 stores in the past 12 months, all in Minnesota. —A face-lift and menu revamp conducted last year are sparking a turnaround for

“What I did was focus on repositioning and rebranding an iconic brand in the Twin Cities that the previous management had left alone and ignored,” Goldberg said. —A face-lift and menu revamp conducted last year are sparking a turnaround for

Goldberg introduced new items to the Leeann Chin menu that were developed for Mandarin Express, including the popular Grilled Bourbon Chicken and Firecracker Shrimp. He also introduced Red Cherry, a line of Korean-style tart yogurts available within Leeann Chin units. —A face-lift and menu revamp conducted last year are sparking a turnaround for

With consumers eating out less often because of the recession, operators need to continue to introduce new items and changes to attract customers, said consultant Allan Hickok of Restaurant & Retail Strategies LLC in Minneapolis. —A face-lift and menu revamp conducted last year are sparking a turnaround for

“You have to create news at the retail level to get them coming in more frequently,” Hickok said. “You have to create more occasions, and that seems to be what Leeann Chin is trying to do.” —A face-lift and menu revamp conducted last year are sparking a turnaround for

The remodeling and improved menu helped turn around a same-store sales slide, Goldberg said. Same-store sales at Leeann Chin were down 7 percent in 2007 from the previous year. Same-store sales rose 1 percent in 2008; however, they dropped about 2 percent in 2009, he said. The average unit does about $1 million in annual sales. The average check is around $9. —A face-lift and menu revamp conducted last year are sparking a turnaround for

Total revenue for both chains was $60 million last year. —A face-lift and menu revamp conducted last year are sparking a turnaround for

“Our being down slightly is absolutely correlated with the economy,” Goldberg said. “We believe, based on what our competition is doing, that we’re doing exceptionally for being down a few points this year.… We’ve gained better customer traction and highly positive feedback from our customers who truly rave about our food.”— [email protected] —A face-lift and menu revamp conducted last year are sparking a turnaround for

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