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CALIFORNIA

Numero Uno Buys Oregon Sandwich-Bakery Chain

Restaurants: The Van Nuys-based company, struggling to rebound, gets in on the dual-concept trend.

January 23, 1997|KIMBERLY SANCHEZ | TIMES STAFF WRITER

The Numero Uno pizza chain said Wednesday that it has bought a small, upscale chain of Oregon sandwich and bakery shops and plans to market a dual-concept restaurant at the Oregon outlets, joining fast-food industry giants such as Pizza Hut and Carl's Jr. in combining two types of restaurants under one roof.

Van Nuys-based N.U. Pizza Holding Corp., which paid $200,000 in cash for the Victorian-styled Oregon's Original Sandwich Express & Bakery stores, said it expects the new dual concept "will be the growth vehicle of the company for the future."

N.U. Pizza, struggling back from a string of losses, will retrofit the new stores under the name Formaggi/Sandwich Express. The 44 Los Angeles-area Numero Uno restaurants will not change, except to add two sandwiches sold by the Oregon chain.

"It's very exciting," said N.U. Pizza President Ron Gelet, who founded the chain in 1973. "It would be like walking into a Subway during the day and an Italian restaurant at night . . . except it's a very upscale sandwich operation. They're absolutely gorgeous."

Because 80% of the sandwich shops' business comes from lunchtime sales and 80% of the pizza stores' sales are made in the evening, the combination of the two is "conceptually and strategically a good idea," said Bob Sandelman, a Brea-based restaurant industry consultant.

Dallas-based Pizza Hut is also experimenting with the concept by opening D'Angelo's/Pizza Hut stores serving sub sandwiches in test markets. Carl's Jr. added the Green Burrito chain to its fast-food outlets several years ago.

"Dual branding is becoming more and more common," Sandelman said. "It makes sense from a chain's standpoint in that they can complement each other."

Gelet plans to open company-owned Formaggi/Sandwich Express shops in Northern California this year as well as sell franchises.

The pizza firm, which suffered a $3.3-million loss in its 1995 fiscal year ended June 30, 1995, has been restructuring since then. N.U. Pizza sold its company-owned stores in 1995 and bought three back from franchisees last year. It reported a $4,900 net operating profit in its first fiscal quarter ended Sept. 30, 1996, a $280,000 increase over the year-ago period. The company expects to post a profit of more than $100,000 in the second quarter.

"The doom-and-gloom days are behind us," said Gelet.

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