Starbucks buys La Boulange for $100 million

Stacy Finz
Monday, June 4, 2012
(06-04) 16:24 PDT

SAN FRANCISCO -- Bay Bread Group's La Boulange Cafe & Bakery, the San Francisco bake shop known for its French pastries and sandwich menu, was sold Monday for $100 million to Starbucks Coffee Co.

La Boulange's founder, Pascal Rigo, will remain general manager of both Bay Bread and La Boulange, while Starbucks plans to take the fast-casual restaurant chain national and fill its own coffee shops with baked goods produced by the bakery.

"It's a superb opportunity to bring high-quality food into Starbucks," said Cliff Burrows, president of the Seattle coffee company's United States and Americas' division, adding that La Boulange also will start selling a Starbucks' brand coffee.

As far as expanding La Boulange, Burrows said they "will take it one store at a time" and have not determined future locations. "Wherever opportunity takes us," he said.

Rigo founded the company in 1999 with La Boulangerie - a bakery with an oven in the back of the store - on Pine Street and lived above the shop for nine years. That store became the prototype for 19 La Boulange cafes across the Bay Area.

Rigo expanded the company six years ago by joining forces with Next World Group, a privately held global investment firm with offices in San Francisco, Brussels and Paris. Sébastien Lépinard, Next World's founder, said their intention was to eventually take the company nationwide.

"It would have taken us much more time," Lépinard said. "Having Starbucks come in is an amazing opportunity for La Boulange and Bay Bread."

The deal is expected to close in the third quarter of this year and Burrows said pastries and baked items will start replacing Starbucks' current bakery fare in 2013. There are 17,000 Starbucks worldwide, including more than 10,000 stores in the United States. Starbucks also owns Seattle's Best Coffee, Tazo Tea and Evoluion Fresh fruit juices. La Boulange will be the only bakery in its portfolio.

La Boulange's new Starbucks' status may not play well in San Francisco. The city has a steadfast policy against formula retail. Rigo doesn't seem too worried. The bakery's 20th store is scheduled to open in the Westfield San Francisco Centre in coming months.

"Everyone at La Boulange is so excited about the sale," said Rigo, adding that the coffee giant is the perfect partner for helping the bakery and cafe achieve its potential.

Stacy Finz is a San Francisco Chronicle staff writer. E-mail: Twitter: @sfinz

Starbucks buys La Boulange for $100 million