Hard Choices

Hard Choices: Ronald M. Shaich

In 1980, I opened a cookie store in Boston. I wanted to add French baked goods and merged with Au Bon Pain, a small, troubled business that was in debt. I owned 60 percent of the new company. By 1993 we were a public venture with about 250 stores when we bought St. Louis Bread, a chain of cafés that made and served artisan bread. I quickly felt it had more potential than Au Bon Pain. It was tapping into a long-term trend: a drive for specialness. People wanted fresh, local food. We began to roll out bakery-cafés and eventually changed the name to Panera Bread.

Over Christmas in 1998, I was sitting on a beach in the Caribbean and feeling down. Panera (PNRA) was our smallest division, with 135 stores. It was a jewel in the rough, and I felt we were going to screw it up. Then a friend said, "What if Panera owned Au Bon Pain?" I knew I'd have to sell everything and put my energies into Panera. It was a wrenching decision. Au Bon Pain was my first son. But it had to go if Panera was going to be a national brand. I told my board we had to rip the company apart to focus on Panera. It was a bet-the-job kind of choice. There was a big fight, and there was very serious questioning of me. The stock was flat. The Internet was booming and there was pressure to figure out what to do online. I was saying double or nothing.

After getting the go-ahead, our sale to a private equity buyer dragged out over 18 months. I finally threatened to take Au Bon Pain private myself just to get the deal done. We got around $73 million from that to invest in Panera. It wasn't all a success from there. We atrophied after the close and had a drop in profitability. It took a while to evolve the concept. We have about 1,500 Panera cafés now. We're also testing pay-what-you-can cafés as a philanthropic endeavor.

I make my best decisions when I'm on vacation. You're not focused on all the stuff that comes at you as CEO. I've moved into a chairman role and I'm now more productive than ever. My decisions are formed by where I want to go. You can see the sculpture you're trying to make. Then you have to iterate to get there.

Race, Class, and the Future of Ferguson

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

blog comments powered by Disqus