By TIIFFANY MONTGOMERY
Earlier this month, Columbus, Ohio-based restaurant operator Bob Evans Farms Inc. served up some comfort food for investors,quarterly results that beat expectations and a reaffirmed outlook for this quarter and next.
And for dessert: a dividend and stepped-up share buyback.
The only sour spot was Mimi’s Cafe, the Tustin-based restaurant chain Bob Evans bought for $180 million in 2004.
Mimi’s, which runs 118 restaurants in 22 Western states, saw a 1.5% drop in sales at restaurants open at least a year in the quarter ended Oct. 26. It was the second quarter in a row of disappointing sales for the chain, which has yearly sales of about $380 million.
The company’s namesake Bob Evans Restaurants, with 580 locations in the Midwest and East, saw same-store sales rise 0.7% in the latest quarter.
Bob Evans also makes sausage and other frozen food sold at stores and has yearly sales of $1.7 billon.
Mimi’s, known for comfort food and whimsical restaurants with a French country cottage theme, are coming up short in areas hit by
the subprime mortgage fallout, company spokesman David Poplar said.
“It’s almost uncanny,” he said.
New CEO
Bob Evans is looking to a new Mimi’s president, Tim Pulido, to shake things up.
He replaces Russ Bendel, who came on in 2001 when Mimi’s still was part of Tustin-based SWH Corp., owned by the founding Simms family.
Bendel oversaw expansion in California and neighboring states, as well as the sale three years ago to Bob Evans.
In September, Bendel joined Calabasas-based Cheesecake Factory Inc. as president and chief operating officer.
Cheescake Factory does about $10 million annually per restaurant, among the top in the business. Mimi’s does $3.3 million per restaurant while Bob Evans Restaurants is at $1.7 million.
“I truly enjoyed working at Mimi’s,” Bendel said. “But this was a unique opportunity that might not come around again in my life.”
Bendel said he’s upbeat about Mimi’s growth prospects, as are Bob Evans executives. Sales at new restaurants are running above the chain’s average, according to the company.
Pulido, who starts at Mimi’s early next month, is charged with boosting sales and managing the chain’s costs and growth.
He’s leaving as chief executive from Alhambra-based Shakey’s USA, a pizza parlor chain that’s part of Jacmar Cos.
From 2003 to 2005, Pulido was president and chief operating officer of San Clemente-based Pick Up Stix, part of Minnesota’s Carlson Cos.
Earlier, Pulido spent 19 years at Pepsico Inc. in its restaurant division.
Pulido wasn’t available for comment last week.
Mimi’s is striving to trim costs to offset slowing same-store sales. The company has cut labor hours and pre-opening expenses, according to company filings.
For the 12 months through April, the company plans to open 17 Mimi’s restaurants.
One tweak being added to new restaurants and some existing ones: full bars, which will help alcohol sales and profits, according to Bob Evans’ latest annual report.
For the 12 months through last April, alcohol sales accounted for 3.4% of Mimi’s sales, versus 13% at Cheesecake Factory.
Mimi’s troubles are due more to the economic climate than anything else, said Conrad Lyon, an analyst with FTN Midwest Securities Corp.
Other casual dining chains that are big on California have suffered as well, including P.F. Chang’s, Cheesecake Factory and Chili’s.
“It’s a tough market for most operators in Southern California,” Lyon said.
Mimi’s is doing well in new markets because of its low check average of $10.50 per guest, Lyon said. And the restaurants have a nicer atmosphere than cheaper rivals such as Denny’s Corp. and IHOP Corp. which average $7 to $8 per check.
“It’s really a testament to (the concept) that the restaurants are resonating in the Midwest,” Lyon said.
Bob Evans spokesman Poplar said the company remains pleased with the Mimi’s acquisition.
“We still see the economics at Mimi’s as very good and continue to grow that concept,” he said.
