Cava has work cut out for it to turn around Zoe’s

Cava Group, which agreed in August to acquire Zoe’s Kitchen (NYSE: ZOES), will have an uphill battle to turn around its Mediterranean restaurant rival. 

Zoe’s Kitchen’s same-store sales, a key restaurant industry metric, fell between 7 and 8 percent in the first five weeks of the third quarter, according to a preliminary proxy Zoe’s filed with the Securities and Exchange Commission Sept. 25. 

That followed two previous quarters of negative same-store sales comparisons: Sales fell 2.3 percent in the first quarter and 2.5 percent in the second quarter. 

Those declining results actually allowed Cava and its fellow buyers — Panera founder Ron Shaich’s Act III Holdings and venture firm Invus Group — to lower their offer for the troubled restaurant chain. While their initial offer came in at $13.25 per share in early August, the buyers reduced that to $12.75 per share a week later. The deal is worth an estimated $300 million.

The new price “reflected the Company’s materially…

Read the full story from the Washington Business Journal.

More from WTOP

Log in to your WTOP account for notifications and alerts customized for you.

Sign up