Bagelmaker Will Shutter 90,000-SF Facility

EATONTOWN, NJ-New World Restaurant Group has targeted the end of this year for closure of its 90,000-sf combination production and headquarters facility here, as well as a smaller facility in Southern California, as part of a consolidation effort aimed at cutting costs. The moves are part of an ongoing effort to streamline the company’s operations in the wake of its acquisition a year ago of the Einstein/Noah Bagel Corp.

The production operations will be consolidated at an existing company plant in Whittier, CA and a plant Avon, IN operated by Harlan Bakery, a dough-making contractor. Both of those facilities are operating at 70% of capacity, according to a company spokesman. “They are capable of manufacturing products for several different brands without requiring a major capital investment,” according to the spokesman.

Over the years, New World has accumulated several chains, among them Manhattan Bagel, Chesapeake Bagel Bakery, Einstein Brothers, Noah’s Bagels and New World Coffee/Willoughby’s Coffee & Tea. Recently, the company’s headquarters have been split between this Monmouth County community, where the Manhattan Bagel Co. first set up shop a decade ago, and Golden, CO, home base for the Einstein/Noah operations.

“The decision to close the plants was a painful but necessary step in our efforts to generate cost savings from the consolidation of the New World and Einstein organizations,” according to Anthony Wedo, New World chairman/CEO. “These consolidations are the result of a comprehensive review of the company’s operations. It gives us flexibility to expand production capacity without tying up additional capital.

New World, which has 468 company-owned and 293 franchised locations in 34 states, including 54 stores in New Jersey, will continue “to maintain our East Coast franchise support center in New Jersey,” according to the company spokesman. “We will relocate our offices and franchisee training facility from Eatontown to another site in Central New Jersey by the end of the year.”

The new location, which has not been disclosed, will house New World executives and support personnel for the Manhattan Bagel, Chesapeake Bagel Bakery and New World Coffee/Willoughby’s Coffee & Tea brands. Einstein Bros. will continue to be operated out of Golden, CO.

As part of the consolidation, New World expects to record a one-time charge in this year’s third quarter for estimated employee severance (about 60 jobs are expected to be cut at the two locations), plant closing and lease obligation costs. The company will also repay a $2 million note to the New Jersey EDA relating to the Eatontown facility.”