Balducci's is coming back for a second helping. Under new ownership, the storied gourmet chain, which exited the Manhattan market last year, is eyeing several locations here for small, quick-service stores, as well as for a 10,000-square-foot flagship.
Known for its enticing meats, cheeses and Italian delicacies, 64-year-old Balducci's currently operates six locations in New York state, Connecticut, Virginia and Maryland, along with three quick-service shops at John F. Kennedy International Airport. Starting this fall, it is planning to open as many as three small midtown locations, ranging from 1,000 square feet to 2,000 square feet in size.
“An iconic New York brand”
“We're looking to put our foot in the market,” says Jason Pruger, the Newmark Knight Frank Retail broker who, along with colleague Ross Kaplan, is exclusively representing Balducci's in its search. “Balducci's is an iconic New York brand that we're excited to bring back.”
For its larger Big Apple flagship, the chain is searching “affluent, dense residential neighborhoods” such as the Upper East Side and Upper West Side, Mr. Pruger notes.
Like many other vendors of upscale goods, Balducci's ran into trouble during the recession. Some of that trouble arose from the chain's former owner, an affiliate of the Bear Stearns' merchant banking group. In April 2009, Balducci's shuttered its two remaining Manhattan locations in Chelsea and the Upper West Side. Around the same time, the grocer was sold to New York investment firm Angelo Gordon & Co.
The fine foods chain once operated a celebrated store on Sixth Avenue in Greenwich Village, from 1972 to 2003. At the time of the 2009 Manhattan closures, Balducci's also terminated a Washington, D.C., store.
But now, under the helm of Angelo Gordon, which also owns New Jersey-based Kings Super Markets, the grocer could grab a seat at the head of the specialty foods table, experts say.
“[Balducci's under Kings] will be a very formidable foe, particularly for A&P's Food Emporium,” says supermarket consultant Burt Flick-inger, noting A&P's recent financial difficulties. He adds that Kings “is one of the best seafood retailers in the U.S. and is very strong in delis, and will bring those skills to Balducci's in New York.”
Jim Demme, the Angelo Gordon senior adviser who led the acquisition of Balducci's, did not immediately return calls for comment.
Returning on a smaller scale
Sizing down its first retail outposts is a good starting point for the chain's re-entry here, according to industry consultants.
“Real estate being as expensive as it is in Manhattan, it's not a bad idea to go smaller” says Matt Casey, who runs grocery consultancy Matthew P. Casey and Associates.
However, while it now has the operating heft of Kings behind it, Balducci's still has to worry about some tough competition from similar upscale players, many of which are in expansion mode. Fairway Market, for example, has three New York City locations, along with a 60,000-square-foot Upper East Side facility on the way. Whole Foods and Trader Joe's have recently opened additional Manhattan stores as well.
“Hopefully, they've learned their Big Apple lessons and will re-enter smartly,” says Clark Wolf, a restaurant industry consultant. “They'll have to differentiate themselves.”
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