Noodles & Company: A Menu to Please All Customers

Getting the attention of the business press does not always mean that the news is good.  However, one of the nicest ways is a successful Initial Public Offering.  Noodles and Company, a casual restaurant chain headquartered in Broomfield, Colorado was able to accomplish this feat.  Wall Street had clearly underestimated the initial price of the stock, but investors did not. 

With so many difficult public offerings, what made this company so desirable?  A simple menu based on a food staple of so many cultures.  The company satiates the eating public’s desire for noodle dishes no matter the origin of that dish.  You can get a nice Far Eastern Thai dish or enjoy some nice traditional macaroni and cheese.  However, despite the universality of the noodle, not everyone is in the mood for pasta.  Noodles and Company does not consider that blasphemy, they consider that a marketing opportunity.  Their menu is diverse with offering such as cheese steaks and pork sandwiches.  The restaurant also includes a lower calorie menu with entrees under 500 calories.  The meals are reasonably priced at an average of eight dollars an entrée.  It is a no-nonsense approach that gives the people what they want and the people have responded accordingly.

Maybe Wall Street took its time warming up to this restaurant, but if you head west from the Atlantic, you will find almost 350 locations, 50 of which are franchises.  The largest concentration of Noodles and Company outlets is in the Midwest, and 50 more nationwide are on tap.  Some store sales growth is at solid 5%.  The company was founded in 1995.  Kevin Reddy, an industry veteran from Chipotle, has been CEO since 2006. Not exactly great timing, as the economy was headed toward a recession.  Despite this challenge, he doubled revenues and quadrupled operating incoming in the four years from 2008 and 2012. 

Under the Canopy: Organic Products for the Fashionable

The market for organic products goes beyond food and drink. For people who embrace the organic lifestyle, anything that they can get that is organic will make them feel better about themselves. Under the Canopy a, manufacturer in both the home products and women’s clothing, has embraced this idea. The company’s products are not just organic; they are also fashionable and comfortable.

Under the Canopy was founded in 1996 by Marci Zaroff, who still serves as its president. She realized that pesticides were not just used in food; they were also used in textile crops, particularly in cotton. She decided to make products from organic natural products. She also realized that many people may love wearing organic and paying for organic but it must look good. She answered the call with fashionable looks that can compete with anything on the runway but did so at affordable prices. She started by selling her products at the best place to find organic things: The Whole Foods Markets.

The company has expanded beyond fashion with a whole line of organic home products including bathroom and bedroom linens. Just like the clothes, these products give the customer the feeling of comfort and the assurance of being chemical free.

Fifth and Pacific: Address for a Fashionable Portfolio of Companies

Fifth and Pacific may be one of the newer names in the women’s fashion, but the company behind it has a long history. The company is the survivor of the reorganized Liz Claiborne, a brand name long synonymous with women’s fashion. However, the Claiborne started to struggle in the middle of the last decade and was not able to turn around. The company’s flagship brand had a middle market approach that could not be sustained as its target customers looked for less expensive apparel.

The reborn company focused on the high-end, most profitable brands that were still in the portfolio. These included Juicy Couture, Lucky Brand, and Kate Spade. Along with the profitability, the top end of the market is more recession-proof as customers in this category continue to have disposable income. Nonetheless, reducing the company’s exposure to different parts of the market may prove risky in the long run. If one of the remaining brands falls out of fashion, the company will have less of a portfolio to fall back on.

The three remaining brands all have great reputations among the fashionable set. Lucky Brands Jeans sell for about $100 dollars. Kate Spade handbags start at about $100. This would make them a little pricey, but more accessible than Coach or Louis Vuitton. Juicy Couture makes apparel, jewelry, handbags, perfume, and accessories for everyday wear. This includes signature items like colorful sweat suits and charm bracelets.

Of the three brands left, Juicy is having the most trouble recovering and may end up on the trading block. Overall, however, Wall Street has applauded the reorganization. The price is up four-fold in the last two years. The financials are mixed. Income was still negative at the end of 2012, however losses had been cut in half. Cash flow from operations has also turned positive. However, the company will need to improve flat revenues if it hopes to continue its positive trajectory.

NJOY: An Alternative to Cigarette Smoke

Despite government warnings, restricted areas, and large “sin” taxes, the lure of cigarette smoking remains.  For those who want to break free of this habit, there are alternatives.  One of those alternatives, NJOY Cigarettes has developed the most popular brand of electronic cigarettes.  Electronic cigarettes give smokers the nicotine that they crave without the tobacco.  The cigarette chamber is filled with the nicotine and, when the user takes a drag, it creates a vapor similar to traditional cigarettes.  NJOY has a full line of products including rechargeable and non-rechargeable devices.

With a potential American market of 46 million smokers, NJOY has plenty of room for growth.  Its products are in almost all of the top convenience stores and 66,000 retail outlets.  To continue its focus as a tobacco alternative, NJOY has added Former Surgeon General Dr. Richard Carmona to its Board of Directors.  This, along with being the first electronic cigarette company to join the national “We Card” program to stop juvenile smoking indicates the company’s dedication to stopping or slowing tobacco use.

Hilco Brands: Turning Around the Brands that Consumers Love

Creating a brand and making it survive can be a brutal undertaking.  There are plenty of stores and brands that people loved, but fell out of fashion.  Sometimes it is due to a bad economy, sometimes it is due to ruinous competition, or sometimes it is due to poor marketing decisions.  The question really comes down to this: was it a bad concept or a bad set of circumstances.  This is where Hilco Brands comes in.  Hilco is a part of a financial services firm that purchases viable or distressed companies and turns them around.  In the process, they are able to expand or resurrect brands by putting their experienced management team to work on making the portfolio companies more solid and able to grow.

Hilco Brands is a private equity firm located in Northbrook Illinois.  You may not recognize the name Hilco, but you will recognize the names of the companies that they own presently or in the past.  Names such as Polaroid, Halston, The Sharper Image, and Bombay Brands.  These companies make products that clients loved; however, consumers can be fickle and the economy is cyclical.  A nifty item from The Sharper Image might make a great gift, but when disposable income becomes tighter, customers look for cheaper alternatives.

A private equity firm like Hilco can be a perfect fit for rebuilding a brand.  When a company is acquired, Hilco will arrive with new financing, an experienced management team, and a business plan for turnaround or expansion.  These business plans look long term, not quarter to quarter like Wall Street analysts.  This will give management and workers a chance to roll out changes that focus on building the top line (revenues) as much as they do bottom line (income).  Ownership and management are now able to focus on the same issues.  Hilco also has financial professionals who can assist with reorganization and who have a willing army of bankers to service them.  Therefore, when a company is ready to be sold or IPO, Hilco has buttressed the brand with a strong balance sheet and solid business plan.