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Bagel brands report positive sales trends

Einstein, Bruegger’s push nontraditional expansion

Bagel players Einstein Noah Restaurant Group and Bruegger’s reported strong fourth-quarter results this week, and both companies said they would ramp up nontraditional growth plans in 2011.

Burlington, Vt.-based Bruegger’s Enterprises Inc., for example, is bringing its Canadian coffeehouse concept Timothy’s World Coffee to the United States with a location in Cleveland Hopkins Airport. The new Timothy’s will join a current Bruegger’s outlet there.

The company said it plans to open a Timothy’s in the Boston area this summer, and another in St. Paul, Minn., later in the year. Bruegger’s acquired the 93-unit Timothy’s concept in 2009.

Bruegger’s also is opening the fourth airport unit of its namesake bagel brand at Asheville Regional Airport in North Carolina this year, as well as its first bagel bakery on a military base in San Diego.

Although a private company, Bruegger’s Enterprises Inc. reported that sales for its fourth quarter ended Dec. 28 grew 3.6 percent to $63.2 million compared with the same quarter last year.

Same-store sales rose 3.1 percent systemwide, and increased 4.3 percent at corporate locations.

The chain’s Canadian subsidiary, Threecaf Brands Canada — which includes 93 units of Timothy’s World Coffee and 14 locations of Michel’s Bakery Café — reported a 1.4-percent increase in same-store sales for the quarter.

For the full year, sales for the 437-unit system totaled $254.5 million, up 2.8 percent over fiscal 2009.

During the year, 45 Bruegger’s locations were renovated, and another 40 are slated for renovation in 2011, the company said.

Jim Greco, Bruegger’s chief executive, said: “2010 was a year of consistent revenue growth for our brands. We believe the investments we made to the brand will continue to pay dividends in 2011.”

Lakewood, Colo.-based Einstein Noah, parent of the Einstein Bros. Bagels, Noah’s New York Bagels and Manhattan Bagels brands, has been focusing growth on airports, college campuses and healthcare settings.

In 2011, the company expects to open between 75 and 90 restaurants, including 10 to 14 corporate locations, 20 to 26 franchised and 45 to 50 licensed units.

Einstein Noah said it has 20 signed franchise development agreements for its Einstein Bros. Bagels brand, which will yield about 100 new locations, of which 19 already have opened.

For the fourth quarter ended Dec. 28, Einstein Noah reported earnings of $3.4 million, or 22 cents per share, a 19-percent increase from earnings of $2.9 million, or 17 cents per share, for the fourth quarter the previous year. Revenues rose 2.2 percent to $106.1 million. Same-store sales increased 1.6 percent systemwide.

During 2010, the company benefited from the opening of 15 franchised locations and 35 licensed stores.

Jeff O’Neill, Einstein Noah’s president and chief executive, said positive sales trends for the last two quarters of 2010 were a reflection of ongoing cost-control strategies and product innovation, as well as a continuing marketing emphasis on “fresh-baked goodness.”

Contact Lisa Jennings at [email protected].

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