Equity firm buys Wetzel’s Pretzels

Wetzel’s Pretzels, the Pasadena pretzel chain, has been sold to a Dallas private equity firm.

Levine Leichtman Capital Partners, a Los Angeles private equity firm that has owned Wetzel’s for nine years, sold its majority stake to CenterOak Partners for an undisclosed amount, said Bill Phelps, Wetzel’s chief executive and co-founder. The deal closed Thursday.

The company will remain based in Pasadena. There are no plans to close any of the nearly 300 locations or lay off any of the chain’s roughly 3,000 employees, Phelps said. Phelps, who will stay on as CEO and the largest individual shareholder, said Levine Leichtman held on to its stake in the chain for far longer than most private equity investments. But the firm was closing the fund and had to sell.

“We went out and did an auction because they had to close out their funds,” Phelps said. CenterOak Partners “made the best offer both in terms of money and keeping the team in place.”

Phelps and co-founder Rick Wetzel launched Wetzel’s Pretzels in 1994.

Since the first store opened in the South Bay Galleria in Redondo Beach, the chain has grown to about 290 locations nationwide and 20 locations internationally, including in Canada and Malaysia. Wetzel will retain a seat on the board but no longer will serve as president. Wetzel is cofounder of the fast-growing pizza chain Blaze Pizza.

Phelps said Wetzel’s Pretzels’ mall business has remained strong, despite reports of struggling malls and big-box retailers. Year to date, same-store sales have grown 6.7%, he said.

Phelps said future growth is likely to come increasingly from properties outside of traditional malls, such as train stations, bus terminals and inside WalMart supercenters.