Rounds to expand locations, grow capacity for wholesale

Zak Gilbert doesn't consider himself a baker. Never has, probably never will.

Even though Gilbert works baker's hours up at 4:30 a.m., wrapping up for the day in the mid-afternoon his role is that of a businessman looking to use a single-store bagel company as a platform to build something larger.

In the next few weeks, Gilbert expects to announce the lease of a 5,000-square-foot space that will allow the bagel shop recently christened anew as "Rounds" to make a stronger foray into wholesale deliveries.

The space also is likely to become Rounds' second retail location, joining a long-standing 2,500-square-foot location at Longley Lane and South McCarran Boulevard.

And from there, Gilbert hopes to add at least one more retail location in the Truckee Meadows, bringing the total to three.

Here's his strategy: Previously known as The Bagel Stand, the 2,200-square-foot store along South McCarran has done a good business for 18 years, making and selling bagels and bagel-based sandwiches to employees of nearby businesses and residents.

To grow the business, Gilbert needs to move more bagels and other products through the pipeline.

The store previously sold bagels at wholesale to the University of Nevada, Reno, and Gilbert has added accounts such as the Peppermill and Atlantis. Wholesale business that accounted for 5 percent of the store's revenue when it was purchased by Gilbert in December now accounts for 20 percent of revenues.

The name change to Rounds from The Bagel Stand, meanwhile, reflects Gilbert's plan to add doughnuts to the product mix.

And he's in the process of adding bagel chips to the menu, using a newly purchased chipper to turn a profit on day-old bagels.

Along with the additional retail locations, Gilbert also is studying addition of a food truck operation to sell bagels and doughnuts outside workplaces.

Even a simple change helped the store move more product: The South McCarran store, once open six days a week, now is open seven.

(Separately owned Mix Cupcake Co. shares space at the South McCarran location, subleasing display and baking space from Rounds.)

Gilbert, whose business career includes work in mergers-and-acquisition for Coca-Cola, ownership of Nevada Casting Group Inc., and a stint as a business development manager for the Economic Development Authority of Western Nevada, acknowledges that his strength isn't creation of food products.

"I want to be a great business owner," he says. "I hire good bakers and let them do the baking."

His skills as a business owner were tested early this year, when rising food costs pressured the store's margins. Gilbert passed on a bit of the higher cost to customers, but a solid working capital position allowed him to control costs by buying ingredients in larger quantities at lower prices.

And he's been putting plenty of hard work into the business. Although he hires good bakers, Gilbert still is at the store every day well before its 6 a.m. opening, working with customers until 2, then taking care of paperwork before he calls it a day.

"This is a really hard business," he acknowledges.

When Gilbert bought the company late last year, it had two employees. Today, it has five.