However, at the end of the strategic-planning process, Rosenthal decided The Bread Co. should be less of a separate business and opted to make Hutkin, then 40, CEO and president of everything. The planning had helped refocus the partners on their strengths. "If we were going to really make this thing grow in a professional, well-managed way, it was going to require a much narrower view of things we each had to do," Rosenthal says. "I had been on the point for five years, and I'd started thinking that it might be nice not to be there."
Linda Rosenthal says that turning over the titles to Hutkin didn't seem to be a traumatic decision for her husband: "Ken just told me that that's what he thought he should do, because there are so many things you have to do as president -- everybody comes to you with everything -- and he wanted to concentrate on production." The company separated ownership from management -- the Rosenthals remained two-thirds owners, with Ken becoming chairman -- and Hutkin took the helm. As difficult as the decision may have been initially on Klevens and Berger, the four seem to have crafted a closely interconnected management team.
The company finally had cash, too, to hire more management talent: in addition to Happel, who was brought on as CFO from Western Union, where he'd been manager of financial operations, it hired a director of store operations with 20 years' experience in the restaurant and franchise business, and an MIS chief.
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The future: January 1993 to...
"1993 will be an important year in the history of Saint Louis Bread Co. Its success will not be measured in its growth, but in how it will position itself to grow substantially in 1994 and beyond." That's from the company's business plan, and, indeed, 1993 has been the year the company deliberately prepared for further expansion not only within the city but also to locations well outside St. Louis.
With new-product development still continuing (forays into tiramisu and jalapeÑo bread, for example), Saint Louis Bread developed its first marketing budget. It began joint promotions with companies including Blockbuster Video, with whom it's offering a kind of buy-one-get-one deal. ("We're thinking about using an early Clint Eastwood still," says Hutkin, "with him holding a video in one hand and a baguette in the other.") Klevens's visual mantra, which he pulls from his desk, is a November 1991 Business Week cover. "Value Marketing," screech the cartoonish bubble letters. "Top Quality! A Fair Price! And Great Service! It's the Way to Sell in the 90's!"
The company's focus has been to prepare for franchising, which the Rosenthals had thought about -- and put on the back burner -- almost since day one. "You give away a big percentage," says Hutkin, "and you don't make as much money, but it's a cheaper way to grow."
Trudging through the tedious task of drawing up a legal document, Hutkin has been mapping out three types of areas for testing franchising -- Kansas City, Mo., a medium-size metro market; Springfield, Mo., a smaller and less urbane city of 150,000; and a yet-unnamed small town of 25,000 in Missouri or Illinois. "Franchising is a lot of things, but in large part it's another layer of distribution," says Hutkin, whose office is ringed with maps of St. Louis and the United States, dotted with color-coded pushpins. "We have to make sure there's not a hitch."
Getting products to the farther sites was a matter of figuring out everything from what kinds of boxes to use to how you package the product to how you ensure quality. "We tested this in a prototype store for months," says Rosenthal, "running it as though it were 200 miles away." The first two people who signed on as franchisees both have territories, in which they're expected to operate four to six stores each.
The company's plans also call for a ramp-up in the number of company-owned units: another 4 by the end of 1993, and 10 in 1994, mostly outside the city. The focus is on areas where there's a void -- places that don't already have upscale bakery restaurants.
To add to the management voices, Hutkin has begun setting up an advisory board of outsiders. The company has also launched an advisory board of insiders. Staff people from all areas discuss and make recommendations on such issues as holiday schedules, vacations, and tuition reimbursement. Training, too, has been revamped by the director of store operations, Jeffrey Rains. "A new hire used to come through in a couple of hours," says Hutkin. "'Here's the creed, here's the mission statement, there's the store.' Now, new hires spend 10 hours paid time with a manager, getting cross-trained in how to run the register, how to make sandwiches, how to make cappuccino." There are 56 training modules, covering focused areas such as "Espresso Standards" and "Product Packaging," with different jobs requiring different combinations of training. By this past summer all new hires were being trained under the new system.
