CJ Foodville is on pace for $75 mn investment for bakery expansion

Tous les Jours in Brooklyn, New York. [Courtesy of CJ Foodville]

South Korea’s CJ Foodville Corp., known for its Tous les Jours bakery brand, is accelerating plans to raise 100 billion won ($75 million) from outside investors based on its 500 billion won enterprise value.

According to sources on Thursday, CJ Foodville is in the final stages of evaluating a strategy to attract 100 billion won from a recently established private equity fund (PEF) operator. The investment plan was managed by Samjeong KPMG, which witnessed participation from multiple PEF operators, including KB Private Equity and Keistone Partners. Sources said that CJ Foodville’s corporate value came to 500 billion won during the bidding process. The company is anticipated to unveil its preferred negotiator as early as next week.

The investment plan is gaining attention as it comes amidst operational challenges faced by several CJ Group affiliates. The ongoing expansion of the bakery franchise brand into the global market is being interpreted positively by investors.

Tous les Jours set a target to open 120 stores within the United States by the end of this year, with the opening of the 100th store scheduled for this month. In the medium to long term, the company plans to operate 1,000 stores in the U.S. within the next 7 years. The brand’s popularity continues to rise locally, and it was even featured on the U.S. network Fox News in June.

CJ Foodville’s U.S. subsidiary reported a growth of about 50 percent in sales, reaching 68.3 billion won last year, up from 45.6 billion won a year ago. During the same period, operating profit increased more than tenfold to 10.2 billion won. CJ Foodville’s overall business performance is also on the rise, with sales for the past year up by 25 percent to 759.8 billion won, and operating profit up more than sixfold to 26.1 billion won.

CJ Foodville is looking to expand its presence in foreign markets using the investment. It is currently in the process of exploring options to set up baking facilities in U.S. states like Texas and Georgia. The move is aimed at ensuring a seamless supply of products by locally producing them.

Back in 2020, due to the challenges brought about by the Covid-19 pandemic, CJ Foodville contemplated selling Tous les Jours. However, the company shifted its focus afterward, concentrating on improving the brand’s competitiveness and remarkably turned it into a significant revenue generator within the corporate structure. CJ Corp. maintains control over a substantial 96 percent share of CJ Foodville.