LANCASTER COUNTY, PA - Gap-based Auntie Anne’s Inc. announced Tuesday it has agreed to purchase the historic former Lancaster Post Office building.
Sam Beiler, Auntie Anne’s president and chief operating officer, said the $266 million global company will move its headquarters and training center to the building in downtown Lancaster, at Chestnut and Prince streets, by June.
The total cost of the building purchase and minor renovation work will be about $7 million, said Beiler.
“It’s been an amazing year-and-a half at Auntie Anne’s,” said Beiler, who purchased the company from founder Anne F. Beiler and Jonas Beiler in the first quarter of 2005.
“The city is very exciting to me. The growth and dynamics there are impressive. We’ve looked there for a while and landed on this building, which I think is one of the best in the city,” he said.
Auntie Anne’s will move 110 employees to the building at 48-50 W. Chestnut St., including the staff from its headquarters and training center in Gap.
Beiler said Auntie Anne’s will likely complete another deal within a few weeks for the purchase of production and warehouse facilities in Lancaster.
The company expects to add 65 to 70 new jobs between the two facilities within three years of moving into the city.
Lancaster Mayor Rick Gray said the Auntie Anne’s move will benefit city residents and businesses.
“It’s great news for downtown. It keeps the building on the tax rolls, it provides jobs and provides opportunities for other businesses such as restaurants and art galleries,” Gray said.
“They’re the kind of businesspeople that every city longs to attract. They’re making a commitment to the city, and we’re making a commitment to them.”
Constructed in 1927, the 70,000-square-foot former Lancaster Post Office stands three stories tall on about 1.5 acres. The building maintains original 1920s features such as brass doors, high ceilings and skylights.
The building also has parking for 82 employee vehicles.
“Our employees are excited,” Beiler said. “The move to the city will shorten the drive to work for about 80 percent of employees.”
Auntie Anne’s, which has $266 million in annual sales from 915 stores worldwide, has shared a campus with Dutchland Inc. since the early 1990s.
Within a decade it had run out of space, at 24,000 square feet of office use and 9,000 square feet of warehouse space.
“Our lease is up, and (Dutchland) really needs their space back,” Beiler said. “It’s a good time for us to find a building we can call our own and grow into.”
Beiler said Gray, along with Gov. Rendell’s Action Team and Economic Development Co. of Lancaster County, assisted in putting the funding together for the move. Though not completely finalized, funding will include low-interest state loans.
“The funding package for the project will be a combination of bank and state and equity funding,” Beiler said.
In related news, Auntie Anne’s closed four of is five café/restaurants Monday.
Beiler said he had hoped the cafés would expand the use of Auntie Anne’s specialized dough. The company said it was testing the market for Auntie Anne’s restaurants franchises, but the return on investment in the cafés could not justify a national growth plan, Beiler said.
The company will now focus exclusively on the two areas that are growing: pretzel franchising businesses and prepared products (fundraising pretzel kits), Beiler said.
Auntie Anne’s is in the middle of a new marketing campaign aimed at expanding its brand awareness. The plan includes a makeover of its pretzel stores, including new employee uniforms, equipment and menu designs.
The campaign has worked well, Beiler said, with double-digit increases in same-store sales from a year ago.