Lorenzos eye Goldilocks

Fresh from its acquisition of Japanese fastfood chain Teriyaki Boy, the Lorenzo family’s Pancake House Inc. is now casting an eye on the bakeshop/bakery business particularly Goldilocks which has branches in the United States.

Pancake House chairman Martin Lorenzo said that while they have no immediate plans to acquire a new food business, they are keen on the bakeshop industry given its impressive growth over the years.

Lorenzo, however, said that should their family be forced to sell their 22-percent stake in Singapore-listed Del Monte Pacific Ltd., they would use proceeds for planned investments.

When asked whether Goldilocks was on the list of companies they are looking at for possible acquisitions, Lorenzo said: "That would be a dream. We’ve talked to a lot of companies including Goldilocks."

Goldilocks is one of the biggest bakeshops in the country. Since its first outlet in Pasong Tamo, Makati in 1966, Goldilocks has grown rapidly with currently 174 outlets – 13 stores in the Visayas, four stores in Mindanao, and the rest in Metro Manila – plus 14 stores in California and one in Canada.

Goldilocks began its franchising program in 1991 to help jump-start its expansion.

It offers various kinds cakes and pastries like ensaymada, chicken pie, meringue tart, cinnamon roll, brownies and jellyroll.

Lorenzo said the group is also impressed with the rapid growth of Julie’s Bakeshop, the country’s biggest network of neighborhood bakery. In 1999, it garnered the very first Success Story of the Year award given by the Cebu Chamber of Commerce and Industry.

Julie’s Bakeshop may have only begun in 1981, but its growth has been remarkable. Begun as a "mom-and-pop" business in Mandaue City (north of Cebu), it soon opened a second branch six months later, and its first branch outside Cebu the following year. Since 1981, Julie’s Bakeshop has expanded to a record 350 outlets nationwide, thanks in large part to its franchising program launched in 1999.

Other key players include: Merced Bakeshop, The French Baker, Fortune Bakeshop, Sugarhouse Inc., Rolling Pin, Gardenia Phils., and Delifrance.

Lorenzo said the group will continue to expand its existing businesses to further strengthen its foothold in the casual dining industry.

By yearend, the groups expects to have a total of 92 restaurants consisting of 62 Pancake House stores, 20 Dencio’s, and 10 Teriyaki Boy restaurants. The group’s branch network is expected to grow to 109 by the end of 2006 and further to 126 by 2007.

With the opening of more restaurants, Pancake House expects its net profit to rise over 30 percent this year to P24 million from P18 million in 2004. In 2006 and 2007, the company‚s earnings are projected to grow further to P74 million and P99 million, respectively.

Systemwide sales are also seen to increase to P1.5 billion, P1.8 billion and P2.1 billion by the end of 2005, 2006 and 2007, respectively.

In the nine months ending September this year, Pancake House posted a net profit of P13.8 million, up by 11 percent from the previous year’s level P12.4 million. Revenues jumped 58 percent to P527.4 million.

The group also plans to invade overseas markets to further widen its reach and boost its cashflow. It intends to open branches in Malaysia, Thailand, Singapore, China and South Korea.

It has received queries from interested parties and that initial discussions have been made to enter into joint venture with them to establish the food chain in the said countries.

Pancake House has traditionally been associated with specialty pancakes and waffles and has likewise expanded to offer an array of popular international dishes such as spaghetti, tacos, and chicken.