Case Analysis

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Bon Pain then instituted a comprehensive overhaul of the newly acquired Saint Louis Bread locations, altering the menu and the dini ng atmosphere. The vision was to create a specialty cafe anchored by an au thentic, fresh dough, artisan bakery. and upscale, quick-service menu selections. Between 1993 and 1997, average unit volumes at the revamped Saint Louis Bread tmits increased by 75 percent, and over 100 additional Saint Lou is Bread units were opened. In 1997, the Saint Louis Bread bakery-cafes were renamed Panera Bread in all markets outside St. Louis.

By 1998, it was clear the re-concepted Panera Bread units had connected with consumers. Au Bon Pain management concluded the Panera Bread fonnat had broad market appeal and could be rolled-out nationwide. Ron Shaich believed Panera Bread had the potential to become one of the leading "fast-casual'• restaurant chains in the nation. Shaich also believed that growing Panera Bread into a national chain required significantly more management attention and financial resources than the company could marshal if it continued to pursue expansion of both the Au Bon Pain and Panera Bread chains. He convinced the Au Bon Pain Board of Directors that the best course of action was for the company to go exclusively with the Panera Bread concept and divest the Au Bon Pain cates. ln August 1998, the company announced the sale of its Au Bon Pain bakery-cafe division for $73 million in cash to ABP Corp.; the transaction was completed in May 1999. With the sale of the Au Bon Pain division, the company changed its name to Panera Bread Company. The restructured company had 180 Saint Louis and Panera Bread bakery-cates and a debt-free...