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Growing Dunkin’ Donuts Needs Piles of Dough

When Dunkin’ Brands Group Inc. announced plans to expand its Dunkin’ Donuts chain into Southern California, Aharon Aminpour jumped at the chance to be the Valley franchisee. The Los Angeles native is a graduate of Cal State Northridge who has spent a lot of time in the Valley – and is a huge lover of the doughy confections. “I’ve been a Dunkin’ Donuts fan for many years, and I’ve always wanted them here in California,” he said. Aminpour, 34, who lives in Los Angeles, said that as soon as he found out last January the East Coast donut and coffee shop was migrating west, he began the application process. The process by the company to vet him took roughly eight months, he said. The company expects to open 10 stores in the Los Angeles area, but exact locations are still being determined as lease negotiations are finalized. “We’re still looking all over the Valley,” said Aminpour, who has worked for the last six years as an independent consultant for quick-service restaurants. Dunkin’ Donuts franchises typically cost between $500,000 and $1.2 million, depending on if it is a full drive-thru, stand-alone setup or a non-traditional store such as in an airport, according to the chain. So Aminpour’s costs for opening the first 10 stores could top $12 million. He did not disclose his capital source. R.J. Hottovy, an analyst with Morningstar Inc. in Chicago, said that because Dunkin’ Donuts is a proven national brand, it should perform well on the West Coast. He noted that the stores don’t take long to become profitable and could bring in at least $900,000 in annual sales. “It’s a key growth market for Dunkin’ Brands,” he said. “It’s one of the areas they have had their sights on for a long time.” Dunkin’ Brands Group, based in Canton, Mass., operates 11,000 Dunkin’ Donuts in 33 countries. It plans to open 150 stores in California over the next several years, but Hottovy believes this is “just the starting point.” Glowing Success With only 20 U.S. stores open so far, Japanese retailer Uniqlo is moving into the Glendale Galleria and Northridge Fashion Center on its mission to be the top apparel retailer in the world by 2020. Uniqlo, which specializes in basic clothes of every color, created a buzz when it exploded in Japan over the last decade. And it has made it part of its business strategy to achieve the same goals internationally by oversaturating urban markets. The Valley stores to open Sept. 26 are two of five planned for the Los Angeles area. The other openings are slated for the South Coast Plaza in Costa Mesa, Beverly Center and Los Cerritos Center. “The response to our northern California stores has been fantastic, so we are thrilled to bring the Uniqlo experience to our fans in Los Angeles, a city known for its diversity and energetic lifestyle,” said Uniqlo Chief Executive Larry Meyer in a statement. Uniqlo, a subsidiary of Japanese retail holding company Fast Retailing Co. Ltd., was founded in 1984 in Hiroshima. The chain began its international expansion in 2001 and now has 1,300 stores in 16 markets worldwide, including Australia, China, France, Hong Kong, Russia, Thailand and the U.K. The brand made its U.S. debut in 2006 with a flagship store in New York City and later moved into Connecticut, New Jersey and northern California. Retail analyst Neil Stern of McMillan Doolittle Retail Consultants in Chicago said the desire of Uniqlo to build a Southern California presence suggests that the brand has been financially successful with its initial locations. “It was natural that they come here,” said Stern. “They are aspirationally determined to be the largest apparel retailer in the world, and they’ve been extremely successful in what they’re doing.” Uniqlo’s price points – such as $10 jeans and tank tops or $20 hoodies – are comparable to that of Swedish retailer H&M Company Inc., or L.A.s’ own Forever 21. But Stern said the Japanese retailer’s main competition will be higher end retailers such as Gap Inc. “The core of their proposition is really basics, and they do basics extremely well,” he said. “We have high expectations for them.” Staff Reporter Stephanie Forshee can be reached at (818)316-3121 or [email protected].

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