La Madeleine French Bakery & Café Business Information, Profile, and History

Company Perspectives:

"La Douzaine" (the Baker's Dozen) is a guiding set of principles practiced by la Madeleine officers, directors, managers and associates in their daily interaction with each other and their guests: Joie--We create a feeling of joie de servir in all of our relationships; Food--We have an uncompromising commitment to the quality and uniqueness of our food; Surprise--We have a carte blanche to delight and surprise our guests; Community--We try to be a good neighbor; Listen--We create an open environment where we genuinely listen to and respect one another; Balance--We care for our associates and respect the balance between home and la Madeleine; Profitability--We make a profit for the benefit of all; Recognition--We seek ways to celebrate our successes "big & small"; Individuality--We value the individuality and unique contributions of each associate; Integrity--We act honestly, fairly & ethically; Improvement--We challenge ourselves to be better today than yesterday; Development--We support and develop our associates so that we may all succeed; Roots--We embrace the preserve the heart and spirit that is la Madeleine.

History of La Madeleine French Bakery & Café

La Madeleine French Bakery & Café, headquartered in Dallas, where it was founded by Patrick Esquerre in 1982, operates more than 60 neighborhood bakeries in nine carefully selected markets, including Dallas/Fort Worth (18), Houston (13), Austin (three), San Antonio (four), Baton Rouge (two), New Orleans (six), Atlanta (six), Phoenix (three), and Washington, D.C. (eight). Like an actual village café, each bakery features a cuisine and setting that is distinctly and authentically French, albeit with some concessions made to American tastes, including cafeteria-style dining and a growing takeout service for those who wish to dine at home. Menu offerings are diverse and include such dishes as creme brulee, quiche, Caesar salad, tomato-basil and French onion soups, grilled rosemary chicken, and various puff pastries and croissants--common enough fare in France, perhaps, but hardly ordinary chain restaurant offerings in the United States. La Madeleine bakeries prepare their foods daily, using fresh, natural ingredients containing no preservatives. They make their breads and pastries using traditional wood-burning ovens and serve them in a setting that features French antiques, warm woods, and hand-painted tiles, providing the atmosphere of a genuine French café. The bakeries also offer some charming and unusual features, including French lessons for their customers and a variety of gift items. In addition, la Madeleine markets some of its breads and dishes at select supermarkets in five cities, and in three of these--Dallas, Houston, and New Orleans--also provides catering services.

Origins and Early Expansion: 1982-92

Patrick Esquerre, a native of France, founded la Madeleine in 1982, opening the company's first bakery in the next year. He had grown up in a Loire Valley chateau on a farm. He later described his childhood in a cookbook, From a French Country Kitchen, that he wrote with his mother, Monique Esquerre, from whom he learned the cooking and baking skills he would eventually tap in creating his successful chain. In his early adult years, he developed other useful skills, working for Young & Rubicam, a Paris marketing and public relations firm, and eventually establishing his own company, Dialoguer. Although fascinated with his country's foods and traditions, he was too much involved in both the religious and political affairs of his country to develop what he had learned about his native cuisine from his mother into a business. When he emigrated to the United States to set down new business roots, however, he left many of his public concerns behind.

Initially, Esquerre's plan was to help book foreign rodeos in the United States, but when that did not work out he decided to try turning his entrepreneurial and culinary skills into another sort of business--an authentic French bakery. Encouraged by Dallas retail wizard Stanley Marcus, Esquerre built his first outlet on Mockingbird Lane in the Highland Park area of Dallas, near Southern Methodist University. Because it was Esquerre's idea to add new bakeries one at a time, Marcus encouraged him to select Dallas over Houston for his initial site and to select college students as his initial target base.

Esquerre built the first unit without using an architect, in a somewhat haphazard fashion that involved many changes, some of which came from suggestions made by casual observers who were merely passing by the site. Named for a Paris church, la Madeleine, Esquerre's eatery was almost exclusively a bakery at first, featuring various French breads and pastries, but its menu gradually evolved in a fashion similar to the building itself, especially after la Madeleine became a neighborhood gathering spot. At first, salads and sandwiches were offered, but Esquerre kept adding other authentic French foods to the growing menu, entrees that quickly attracted a widening circle of customers. He even took suggestions from some of them for a few of the menu additions, then saw to it that such newly adopted dishes had a genuine French taste. To make sure everything was authentic, Esquerre hired his bakers in France, bringing them to America and serving as their paternal guide, always referring to them as "associates" and treating them more like family members than employees. Esquerre also had a strong sense of a business's responsibility to its host community, and he is credited with having developed la Madeleine's "menage a trois" marketing concept, donating $1 in food to local food banks for each $2 pledged by viewers or listeners to public television or radio.

La Madeleine expanded quickly, tapping into urban markets that Esquerre and his managerial team believed would be ideal for the kind of cuisine it offered. In 1984, while also expanding in Dallas, it opened its first bakery in New Orleans, in the celebrated French Quarter. In the next year, the company also began preparing foods for wholesale distribution to restaurants, hotels, and grocery chains within some of its market areas, ultimately to include Dallas, Fort Worth, Houston, San Antonio, New Orleans, and Baton Rouge.

A key to its early and ongoing success was not just the authenticity of la Madeleine's foods but their increasing variety. For many holidays, Esquerre's associates prepared special dishes, such as Bûche de Noël (a traditional French dessert prepared at Christmas), Mardi Gras king cakes, and a two-portion version of Sacher Torte (an Austrian classic dessert) prepared for St. Valentine's day. These were part of the "surprise" the company has always stressed as a necessary strategy for renewal in what is an extremely tough market.

Growth Brings Changes in Management: 1992-97

By 1993, when Esquerre was named a finalist for the Ernst & Young's Entrepreneur of the Year award, the la Madeleine chain, a term Esquerre himself deplored, consisted of 16 bakery-cafés. All of them were in Texas except for those in New Orleans, but new outlets were planned for Washington, D.C. and Atlanta. Revenue from sales that year approached $36 million.

The Washington, D.C. market was added in 1994, as was a new Texas market in Austin. Openings followed the next year in Baton Rouge, Atlanta, and Phoenix, which, with other openings in established markets almost doubled the number of bakery-cafés in the chain. The rapid growth and success argued that a more scientific method of market analysis and operational planning would have to replace Esquerre's primarily intuitive entrepreneurial style of management, his paternal and familial approach, which clearly had diminishing relevance and suitability in the face of the wider distribution of la Madeleine's markets.

A smooth and amicable transition in operational control followed. It was one that began in 1992, when William Allen, formerly with Marriott, joined the management team and thereafter served as president and CEO until, in 1997, he was replaced by John Corcoran. Another key member was A. Guy Mercurio, vice-president of real estate development, appointed in 1996. In 1997, with 45 la Madeleine units open, Patrick Esquerre stepped down and severed his formal relationship with la Madeleine, selling his interest in the business to his partners and la Madeleine's chief executives.

The change of guard did not interfere with la Madeleine's basic commitment to providing both an authentic and varied cuisine. By the mid-1990s, menus were featuring new items on the average of two per year, providing customers with the chance to enjoy dishes from various French regions, such as Alsace, Provençe, and Burgundy. As with la Madeleine's recipes for its signature items, always offered, recipes for the new additions were developed by la Madeleine's French chefs through extensive research that required repeated trips to their homeland. The resulting dishes were then "field tested" by a tasting panel and on location with focus groups that included regular la Madeleine patrons. Once a recipe was accepted and was added to the master recipe book, the company used a "train the trainer" approach for teaching it to regional managers, who in turn trained bakers and chefs at each outlet.

New Directions and Management Transitions: 1998-2000

In 1997 la Madeleine began planning a new, smaller kind of unit to add to its chain. The first of these was scheduled for opening in an upscale section of Dallas in October, but unforeseen delays pushed the opening back to April 3 of the next year. At 2,400 square feet, the new outlet was just more than half the size of the regular 4,500-square-foot units. Dubbed "La Madeleine Cuisine," it featured a menu consisting of about 80 percent of the dishes at the larger la Madeleine restaurants, and included such standard signature dishes as rosemary chicken and tomato-basil soup plus a few new dishes. Although the new Cuisine could seat 50 customers, it was based on a "home-meal replacement concept" and was created to increase the company's takeout customer base while not sacrificing la Madeleine's special ambiance. According to John Corcoran, la Madeleine's president, the new Cuisine's slogan was "Take home a little French dish." Plans called for new Cuisines to open at a rate of from two to five per year, starting with the next unit built in Houston.

As the century drew toward its turn, Corcoran continued building a management team to help with the streamlining of la Madeleine. Brought on board were Ole Jensen (vice-president of manufacturing and distribution) and Harry Martin (vice-president and general counsel), who joined in 1998; and Mark Menking (executive vice-president), Scott Gordon (vice-president of operations), and Mark Hudzel (vice-president of training), all of whom assumed their posts in 1999. The challenge was to preserve the charm and authenticity of la Madeleine bakery-cafés while steering the company along more profitable lines of development and continued expansion, to keep, in brief, the friendly environment and some of the personal feel that were Esquerre's trademarks while using more objective and impersonal methods of management and planning.

Many of la Madeleine's bakery-cafes still had bakers and chefs who had been brought from France by Esquerre, and, as previously noted, they would often return home to research and perfect authentic French dishes. For Americans hired as general managers, the company, as it had done from the outset, still provided a short training session in France, so that, despite some changes in its marketing dynamics, its restaurants could maintain their special French ambiance and authentic European cuisine.

La Madeleine's management has insisted that it is wholly committed to the company's founding principles and to retaining the unique, unpretentious atmosphere of each of its bakery-cafés as well as its community support of local charities, something that Esquerre had initiated early on in the company's development. Corcoran attributes the success of la Madeleine, twice named one of the top ten bakeries in the United States by Bon Appétit magazine, to his team's ability to balance the demands of growth and profitability with those founding principles, including its obligations to the host communities of its bakeries.

There has certainly been growth. In 1999 the company broke all its previous records. Its sales were especially strong over the year-end holiday season, between Thanksgiving and New Year's Day, when they totaled $12.1 million, up nine percent from the previous year. By then there were 62 units in operation, employing more than 2,500 "associates," as Patrick Esquerre always insisted on calling his staff members. Plans called for opening an additional two units by February of 2000, but none were projected beyond that point. According to Corcoran, to ensure successful future growth, for the time being the company was going to focus on operations in existing markets, concentrating on wholesale breads and salad dressings and on its catering services. Still, it remains to be seen whether the growth can continue indefinitely without drastically altering la Madeleine's unique image.

Principal Divisions: Bakery and Cafes; Wholesale; Catering; Retail and Catalog; Real Estate and Development.

Principal Competitors: Brinker International, Inc.; Darden Restaurants, Inc.; Starbucks Corporation.

Chronology

• Key Dates:

• 1983: Patrick Esquerre opens the initial la Madeleine bakery in Dallas.
• 1984: The first la Madeleine bakery outside Texas is opened in the French Quarter of New Orleans.
• 1985: Company begins wholesaling goods to restaurants, hotels, and grocery stores; it also opens its first bakeries in Houston and Fort Worth.
• 1994: The company taps into new markets with openings in Washington, D.C. and Austin, Texas.
• 1995: La Madeleine adds three more market sites in Atlanta, Phoenix, and Baton Rouge.
• 1997: Patrick Esquerre sells his interest in la Madeleine to his partners, and John Corcoran is appointed CEO; the company also begins catering services in Houston.
• 1998: The company opens its first la Madeleine Cuisine, a home-meal replacement outlet.