Dive Brief:
- Pei Wei, an Asian fast-casual spinoff of P.F Chang's, has been sold by private investment company Centerbridge Partners to PWD Acquisition, the companies announced Wednesday, according to Nation's Restaurant News.
- The purchase price was not disclosed.
- Pei Wei was split from P.F. Chang's in 2017, and has 193 restaurants across 19 states and South Korea. PWD Acquisition is owned by Lorne Goldberg, who also owns the Asian brands Pick Up Stix, Leeann Chin and Mandarin Express.
Dive Insight:
Pei Wei's sale marks Centerbridge's latest and final move to offload P.F. Chang's and its sister concepts. In March, the firm sold the Asian sit-down chain to TriArtisan Capital Advisors LLC and Paulson & Co Inc. for an undisclosed amount. At the time, the deal was speculated to rake in as much as $700 million — Centerbridge bought both P.F Chang's and Pei Wei in 2012 for $1.1 billion.
It's unclear why Centerbridge has chosen to nix both Asian concepts from its portfolio, but sales for Pei Wei have been on the decline, most recently falling 10.5% to $306 million, according to Restaurant Business. These acquisitions reflect a growing trend in the restaurant space. Analysts interviewed by Restaurant Dive said private equity firms are increasingly turning their focus from retail brands to foodservice concepts, and consolidation in the segment has ramped up in recent years.
It will be interesting to see how this change of hands impacts Pei Wei's growth plans. The restaurant has made tech a bigger part of its strategy of late, tapping its first CIO, Chris Andrews, last fall. Andrews told CIO Dive he oversees digital innovation at the chain, and replaced Pei Wei's "very unstable, very costly" custom online ordering application with online restaurant ordering platform Olo. With a deep-pocketed private equity firm at the wheel, the chain could continue to double down on digital innovation to improve efficiencies and capture new growth.
P.F Chang's CEO Michael Osanloo, for example, told AZ Central that his brand was able to bolster operations under Centerbridge, driving $913 million in sales in 2017 compared to $906 million in 2016.
There is still plenty of room for Pei Wei to grow in the Asian restaurant market. The segment isn't as crowded as other popular food genres — only 8.6% of the top 500 U.S. chains in 2016 were Asian concepts. But Asian food is the fastest-growing food type in America, rising 135% between 1999 and 2015. Limited-service Asian food concepts also grew sales 8.9% in 2018. This growth is luring competitors to the playing field, with Cheesecake Factory launching fast casual Asian concept Social Monk in February, and more could follow.
