Sam's Bagels invites investment

April 15, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

Sam's Bagels & More is offering its customers more than just its chocolate chip, banana, jalapeno and other flavors of bagels -- it's offering them a piece of the action.

In an unusual move for a small company, the owners of the 2-year-old Baltimore bagel business last week sent out 1,500 postcards to customers asking if they would be interested in owning part of the business. Of course, an investment will cost a bit more than a 55-cent cinnamon raisin bagel -- $9,999.45 more.

Allan D. Gallant, chairman and chief executive officer of Bagels Inc., the company that owns the two Sam's Bagels shops, said the idea of offering stock to consumers came from the patrons themselves. "A number of customers said they wanted in," he said. "I like to share success." So far, 14 people say they are interested, Mr. Gallant said.

Any would-be investor is asked to ante up $10,000 -- about 1.5 percent of the company's net worth -- for 1,000 shares of stock. But the company might make some exceptions, Mr. Gallant said, as it is for five elderly ladies in Hampden who are pooling $1,000 apiece and buying a small stake.

"As a neighborhood store, we would like some of our neighbors as shareholders," he said.

The company's original store is at 500 W. Coldspring Lane, and it recently opened a shop at 915 S. Light St. in Federal Hill. A third store, at 3121 St. Paul St., is scheduled to open on June 15.

The major shareholders of the company are now members of the Gallant family -- who are part of the family that owns B. Green & Co., a 78-year-old Maryland company that sold its wholesale grocery business last year. After the stock offering, the major shareholders will still be the Gallant family, according to a prospectus on the stock.

The company hopes to raise about $300,000 with the private offering and increase the number of shareholders from the current seven to around 35, Mr. Gallant. The money from the offering will go toward expanding the operation to five shops by the end of the year, the prospectus said. With a strategy of maintaining ownership of all the stores, the company hopes to have 50 stores in the next five years, Mr. Gallant said.

With only one store for most of its existence, the company had sales of $557,065 last year and $138,052 during the five months it operated in 1992. It also has been profitable, making $6,610 in 1992 and $46,372 last year, according to the prospectus.

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