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Marie Callender's on the Block With $90-Million Price Tag

August 26, 1985|BRUCE HOROVITZ | Times Staff Writer

Marie Callender's Pie Shops Inc. is poised to sell the whole corporate pie.

A couple of million pies and 37 years ago, no one in the Callender family suspected that Mom had a recipe for one of the most successful chains of its kind in the nation. What began in 1948 as a struggling Long Beach bake shop that made pies for a restaurant or two has become a national legacy that is attracting many suitors.

Such was not the case back in 1962, when the tiny company decided to drum up business by giving away pie. Although few folks knew about the tiny shop that was tucked away in Long Beach's industrial area, hundreds responded to a newspaper ad that promised first-time visitors a free piece of pie and a cup of coffee.

Today, a number of visitors are knocking on the company's door for another reason. They want to buy the company.

Don Callender, president and chief executive of the 119-store family restaurant chain, said in a rare interview last week that the privately held company is on the block for $90 million in cash and stock. He has negotiated with two companies in the past few days--including a hotel developer--about a possible merger or acquisition.

At one time or another, Callender said, companies such as General Mills and McDonald's have tried to buy the chain. Several of these rejected pursuers contend that the highly successful company--which some restaurant leaders call the standard of the family-dining industry--has never been serious about selling.

Callender now says he is very serious. "Until recently, I hadn't heard a decent offer," said Callender, the 57-year-old, highly charged son of Marie Callender.

Now, however, he is hearing solid offers despite the fact that the company expects to report a slight earnings decline in fiscal 1985, after five consecutive years of improved profits. Callender said the company could merge or be acquired within days.

His mother's secret recipe for home-baked pies helped turn a tiny specialty pie shop into a retail chain that now has outlets throughout much of the West Coast. Last year, Callender noted, it had net income of nearly $5 million on sales of $175 million.

Mom still keeps a finger in the pie. The 78-year-old widow lives at Leisure World in Laguna Hills, not far from her son's Corona Del Mar waterfront home. If she eats at a Marie Callender's restaurant and finds something not to her liking, she lets Don know about it. "If she calls and complains," Callender said, "I tell her to go to Bob's Big Boy."

But Mom really has had precious little to gripe about. So highly regarded is the restaurant chain, said Jane Wallace, editor of the trade publication Restaurants & Institutions, that "it is one of those places that everyone wants to buy." The only problem, she said, is that "their price is like the national debt."

Joseph K. Fassler, president of Greyhound Food Management, which has tried to purchase Marie Callender's, concurs: "I would like to have acquired them yesterday, but not at their prices."

Callender doesn't buy that. "Everyone's always out looking for disaster sales," he said. "They want to get you behind closed doors, then they treat you like they're selling you a car." But Don sits firmly in the driver's seat of a company that employs more than 10,000 and has steadily grown through both franchising and company-owned stores.

Even with the company up for sale, Callender has big ideas how it can profit from its well-respected logo. Callender would like to soon see the family name atop hotel marquees and on grocery store shelves.

"The market is tired of seeing the same labels, like Heinz, Campbell's and Del Monte," Callender said. Although the company's corn bread mix is now sold at some West Coast supermarkets--with annual sales of $2 million--Callender wants to expand into other foods, from frozen pot pies to hearty soups. Last year, its restaurants sold more than $12 million worth of soup. And, with many hotel chains notorious for the poor quality of their food service, Callender is negotiating with a hotel developer to test-market a 200-room West Coast motor lodge that would bear the Marie Callender name.

Competitors generally agree that Callender can succeed in any of these ventures. "The customers' perception of Marie Callender is one of quality," said Ron Higgins, president of Jolly Roger Inc. Adds Eddie Sheldrake, president of Polly's Inc., the Santa Fe Springs pastry and sandwich restaurant chain: "The guy just has a touch."

Callender seldom sets foot in the headquarters building. Instead, he prefers to slip into a pair of walking shorts and sneakers and bicycle from his home to a cubbyhole of an office he keeps at the Marie Callender restaurant in Newport Beach.

Casual Style

On the surface, his management style appears helter-skelter. Other than Callender, few of the executives have titles. "We aren't impressed with titles here," Callender said. "The trick is to just find your place and make yourself valuable."

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