Fast casual Cava completed its acquisition of Zoës Kitchen, the company announced Wednesday. November 22 will mark the first day of operations for the combined company. And with the change, Zoës chief executive Kevin Miles, who helped scale the brand from 21 locations to 268 in eight years, will leave the chain.
When Miles started with Zoës in 2009, the brand had 21 stores in seven states with about $24 million in annual revenue. It generated about $340 million before being dealt to Cava for $12.75 per share in an all-cash transaction valued at roughly $300 million. The move returns Zoës to the private market following a four-year run as a publicly traded restaurant brand.
“It’s been an honor and privilege to lead the growth of this amazing organization over the past nine years. It’s been a total team effort and I’m most proud of the positive impact that the Zoës team has had on so many lives, including our team members, guests and business partners. I also want to thank the support of our investors over the years,” Miles said in a statement.
Cava said Washington, D.C. would serve as the headquarters for the combined company, although Cava would maintain a meaningful presence in Plano, Texas—home to Zoës. Cava added that the Zoës brand would remain intact for the “foreseeable future.”
“Today’s announcement is an exciting milestone for Cava, and we’re thrilled to welcome Zoës Kitchen to our team. Together, these two brands are united by a shared heritage and passion for exceptional Mediterranean cuisine,” said Brett Schulman, Cava CEO, in a statement. “With this acquisition, Cava will be able to broaden our geographic footprint and meet the needs of even more guests—whether in Bethesda or Birmingham, Plano or Pasadena—who crave delicious, healthy food without compromise. As part of the Cava family, Zoës Kitchen will benefit from Cava’s track record of bold culinary innovation and leveraging data and technology to drive growth and convenience.”
Schulman will serve as CEO of the combined company.
Together, Cava said the duo forms the first omni-channel platform in the fast-casual space that leverage two unique service models and their rapidly growing digital and app-based sales channels, a line of chef-crafted dips and spreads found in more than 250 Whole Foods Markets, and relationships with delivery service providers. This will also position the Cava brand as a leading authority in the booming Mediterranean segment with a workforce of more than 8,000 employees across 24 states.
There are currently more than 70 Cava locations across 10 states. The brand emerged from D.C. full-service restaurant Cava Mezze in the late 2000s. Ron Shaich, founder and former CEO of Panera Bread, helped finance the acquisition through his Act III Holdings investment firm, and will serve as chairman of the board for the combined companies.
Founded in 1995, Zoes has struggled to generate sales in recent quarters. The brand reported Q1 same-store sales declines of 2.3 percent, driven by a 4.4 percent decrease in transactions and product mix, year-over-year. The brand said at the time it planned to slow unit growth in 2019 and close some underperforming and older restaurants.