Ruby Tuesday plans to close 10 percent of domestic units
BY SARAH E. LOCKYER
MARYVILLE, TENN. — Looking to
improve operating results that
have suffered for more than two
years, Ruby Tuesday Inc. said
last month it would shutter
nearly 10 percent of its domestic
corporate restaurant system and
book as much as $55 million in
charges.
During the company’s current
February-ending third quarter, 40
locations will be closed, and during the next several years an additional 30 units will be shuttered,
the company said.
The Maryville, Tenn.-based
Ruby Tuesday operates or franchises 942 restaurants worldwide, including 714 U.S.-based
locations that are run by the
company. Based on the number
of units, it is the third largest casual-dining chain behind Applebee’s Neighborhood Grill & Bar
The initial group of 40
closed restaurants had
produced an annual
multimillion-dollar loss
for Ruby Tuesday Inc.,
according to one analyst.
and Chili’s Grill & Bar.
In its statement outlining the
closures, Ruby Tuesday added
that between 35 and 40 surplus
properties also are marked for
sale. These properties were un-developed real estate assets the
company had purchased and will
now sell, said Steve Rockwell,
Ruby Tuesday’s vice president
of finance.
Of the 40 restaurants earmarked for closure during the cur-
rent quarter, a little fewer than
half of the locations already have
been shuttered, and the remaining restaurants will be closed this
month, Rockwell added. The
restaurant closures were spread
throughout the system, he noted,
although most of corporate Ruby
Tuesday locations are east of the
Mississippi River.
According to securities analyst
Brad Ludington at KeyBanc Capital
(See RUBY, page 9)
Friendly tests Express fast-casual variant,
plans ice-cream-only model for on-site ops
BY ELISSA ELAN
WILBRAHAM, MASS. — With a new
fast-casual prototype and a new
leader at the helm, Friendly Ice
Cream Corp. is looking to revitalize the fortunes of its 505-unit
Friendly’s family-dining chain.
The company, which was acquired in 2007 by Sun Capital Inc.
after years of sliding sales and internal conflict, said in December
that it would begin testing
Friendly’s Express, a fast-casual
concept offering quicker service
within a smaller, more versatile
footprint, next year at three or
four units in Boston, Springfield,
Mass., and Providence, R.I.
Last month also saw the appointment of Ned R. Lidvall, most
recently with Rock Bottom
Restaurants Inc., as president
and chief executive of Wilbraham-based Friendly. He succeeds
George Condos, who announced
his retirement several months
ago.
The prototype units will offer a
reduced menu focusing on the
core items served at the brand’s
full-service units, officials said.
Customers will order their food
while standing at the counter and
it will then be delivered to them at
their tables. Friendly’s Express
will range in size from 2,200 to
2,400 square feet, compared with
the 3,000 to 3,500 square feet required for a traditional Friendly’s,
allowing the chain to seek out
nontraditional sites, said Jim Sullivan, vice president of franchising and development.
“This is probably one of the
more, if not most, exciting pieces
Friendly’s Express will have a pared-down menu that focuses on the core
items of Friendly Ice Cream Corp.’s 505-unit family-dining flagship.
of our business right now,” he said.
“We’re still going to have the traditional 3,500-square-foot restaurant, but this will be an alternative concept for us. We’re also
going to offer an ice-cream-only
[model], à la Cold Stone [Cream-ery], for such captive markets as
[business and industry], airports,
and hospitals. This will allow us to
enter into alternative venues
where our traditional stores may
not be viable for today’s consumer.
“The brand itself is still positioned with ice cream as the hero
and it will still be geared toward
the family. But each family is not
what it was 30 years ago, what
with the speed of lifestyle and
that type of thing.”
Other full-service restaurants
also have introduced fast-casual
formats recently, including
Boston-based Uno Chicago Grill,
which last November unveiled
two Uno Due Go fast-casual units
at the Dallas-Fort Worth International Airport.
Observers say the introduction
of a fast-casual concept is a savvy
move on Friendly’s part.
“It’s a smart thing because, remember, they have a strong position in ice cream, which means
they are really viable,” said New
York-based consultant Malcolm
M. Knapp. “This gives them an opportunity because they can have
much smaller stores with which
to capitalize on the snack business.
“Ice cream was the original
base of the company; they were at
least 50 percent ice cream —
that’s their original heritage,” he
(See FRIENDLY’S, page 6)
McDonald’s Corp.’s “showcase” restaurant on the Las Vegas Strip, Viva
McDonald’s, has several high-tech features for consumers and staffers.
McD raises stakes on Las Vegas
Strip with Viva McDonald’s debut
BY ALAN J. LIDDLE
LAS VEGAS — Viva McDonald’s, a
new McDonald’s Corp. “showcase”
venue on the legendary Strip here,
opened last month with some
high-tech Vegas-style touches for
consumers and employees, an
updated point-of-sale system, and
advanced cooking equipment.
Announcing the new restaurant in classic Las Vegas fashion is
a neon-lit golden-arches marquee
with two hanging LED video display screens measuring 10 feet by
23 feet. In addition, four jumbo 9-
foot-by-8-foot display screens compete for attention on the front of
the restaurant.
Inside, a 12-screen “media
ring” and three other flat-screen
displays share video content from
the new McDonald’s Channel with
the outdoor screens. Among other
things, the McDonald’s Channel
features three-to-five-minute
vignettes of audience-appropriate
content from partnering educational programming sources, including cable TV’s The Discovery
Channel and Animal Planet. Retail product clips also are part of
the entertainment.
McDonald’s new 184-seat Las
Vegas restaurant offers wireless
Internet access for customers, and
its sound system can deliver different content to different zones
within the space, said Brian
Unger, senior vice president of McDonald’s Western division.
Viva McDonald’s is adjacent to
the Circus Circus hotel and casino
and replaces a nearby 25-year-old
unit, which closed just hours before the new location went live.
Unger said McDonald’s worked
with neighbor Boyd Gaming Corp.
to relocate the new restaurant so
Boyd could better execute its Echelon Place project.
(See McD, page 49)
