- Aurify Brands is expanding its Le Pain Quotidien brand, which it acquired in June for $3 million, with at least 10 new restaurants in New York City and the acquisition of a commissary, according to a press release.
- The company bought substantially all of Maison Kayser entities during the Chapter 11 process and will convert these locations into Le Pain Quotidien locations, which will reopen in early 2021. Aurify has also reopened or plans to open 50 Le Pain Quotidien restaurants in select cities and suburban markets in New York, California, Connecticut, Maryland, Virginia, Florida and Washington, D.C.
- While Manhattan has been a challenged market for many restaurants and retailers, Aurify appears to be bullish on the metro, where rents have declined to historic lows following a decline in tourists and office workers.
While Aurify is only reopening about half of the 98 Le Pain Quotidien locations by 2021, its latest move shows that it is optimistic about the chain and has long-term plans to expand the chain further, especially in New York.
"We are big believers in New York City and are thrilled to add these strong locations in this key market to our LPQ portfolio," John Rigos, co-CEO of Aurify Brands, said in the press release. "We expect that the addition of these complementary locations across Manhattan will further engage our customer base as we continue to build this quality brand nationally."
Aurify may have to wait to see any sales growth at these new locations with the area's lack of foot traffic. Aurify said earlier this year that it plans to leave Le Pain Quotidien restaurants closed until things start to get back to normal in Manhattan, according to The New York Times.
As a brand looking to expand in New York City, it could also take advantage of declining retail rents in an area that was once one of the most expensive areas to do business. Many retailers and restaurants have pulled out of the area, saying it’s no longer worth the expense given the sluggish economy. Rents on Fifth Avenue, for example, were down nearly 30% in July, Bloomberg reports. Rents have now hit their lowest level in the area since 2011, according to data from real estate broker CBRE.
Despite cheap real estate, Aurify will have different operational challenges it will need to work through. Le Pain Quotidien didn’t invest in technology or other strategies to take advantage of takeout demand and its earnings before interest, taxes, depreciation and amortization were down $16.8 million in 2019, according to Restaurant Business.
Aurify co-CEO Andy Stern told Restaurant Business that the company has a five- to 10-year view, so it likely isn't expecting an immediate return, which will help give it time to figure out how best to reach consumers, especially as many continue to stay at home.