The Mills Corporation (NYSE: MLS), one of the nation’s leading shopping center developers, announced Thursday (25 October) that Panda Restaurant Group (PRG) has invested in Mills’ wholly-owned FoodBrand subsidiary — a move to strategically and financially grow the successful, emerging business.
In the transaction, PRG will purchase a 40% ownership stake in FoodBrand for $9.5 million, with the two companies partnering on existing assets and future opportunities. PRG will assume two seats on FoodBrand’s five-seat Advisory Board. Mills initiated the FoodBrand business in 1999 to own and manage the food courts and restaurants in Mills properties, with an eye to expand to other shopping centers and other highly-trafficked venues.
FoodBrand currently operates 38 franchise restaurants and fast-food units including Burger King, Sbarro Italian Eatery, Starbucks, Johnny Rockets and Chili’s too, in three Mills venues nationally: Katy Mills in Houston, Opry Mills in Nashville and Arundel Mills in Baltimore, with an additional 12- restaurants scheduled to open at Atlanta’s Discover Mills on November 2.
Privately-held Panda Restaurant Group, based in South Pasadena, CA, is one of the largest restaurant concerns in the United States. Founded in 1973, PRG owns and operates more than 425 restaurants in 34 states with revenues over $325 million, largely under the “Panda Express” gourmet Chinese brand. The “Chain Restaurant” research report calls Panda the fastest-growing chain within the fastest-growing segment (Asian) of the restaurant industry. Panda has received national acclaim for their excellence including the 2000 Golden Chain Award from Nation’s Restaurant News.
“Our new partnership with Panda Restaurant Group is a dynamic marriage with a blue-chip restaurant organization,” related Mark Rivers, Executive Vice President of The Mills Corporation. “Panda represents the very best in professional management and entrepreneurial leadership. They have an international presence, financial strength and broad expertise in food service operations, efficiencies and multi-unit expansion. Together, we are committed to growing and enhancing our FoodBrand business. For Mills, this is a positive step in our ongoing, strategic business initiatives — successfully leveraging our platform of top-tier real estate and consumer relationships with an exceptional partner.”
Added Andrew Cherng, founder and chairman of PRG, “We are delighted to team with Mills, who has built FoodBrand into a very profitable investment model and formidable operating company. FoodBrand affords us the opportunity to diversify and extend our network into new businesses. At Panda, this is a tremendous vehicle to expand our own unique units across a broad spectrum, as Mills continues its robust pipeline of superior real estate venues.”
Carlos Bernal, who will continue as President of FoodBrand, explained, “This new alliance with PRG lays the foundation for a new wave of accelerated growth for FoodBrand. In just two years, we have created a profitable company of $35 million in annual sales with the resources and breadth of experience to prudently grow the business over the next few years. Looking ahead, we intend to explore new opportunities at attractive venues where the FoodBrand business model has proven successful. With the continued retail and consumer expertise of Mills and Panda’s superior restaurant savvy, we offer a combination of resources and skills that are unmatched in the food-and-beverage industry.”
The Mills Corporation is a self-managed real estate investment trust (REIT) based in Arlington, Va., that owns, develops, leases, manages and markets a portfolio of 12 market dominant retail and entertainment destinations (11 Mills and one Block) totaling approximately 17 million square feet in 10 states. Discover Mills, in suburban Atlanta, will open in November, 2001. Currently, the company has five projects under construction and/or development in the United States and two internationally: Toronto, Canada and Madrid, Spain. The company’s Internet address is http://www.millscorp.com.
FoodBrand, L.L.C., is a division of Mills Enterprises, Inc., a wholly- owned subsidiary of The Mills Corporation and an investment of the Panda Restaurant Group, that actively leases, manages and operates a portfolio of twenty leading restaurant franchises in shopping centers nationwide. The Company anticipates introducing its “Master Lease Program” to other complimentary business segments and expanding its core restaurant line-up to better meet the needs of these new business opportunities. FoodBrand is headquartered in Westlake Village, California. The Company’s internet address is http://www.foodbrand.com.