Restaurant auction
If watching your waitress do the Electric Slide while eating seafood out of a bucket is your idea of a good time, you’d better hurry to Joe’s Crab Shack, because the location near you could be closing any day now.
The bankruptcy auction is wrapping up, and it looks likely that Landry’s, owner of restaurants known for being more gimmicky than gourmet, such as Bubba Gump Shrimp and Rainforest Café, will likely win the day for $57 million, pending court approval.
Still a loss to some
But not everyone is celebrating the win. Workers at Joe’s Crab Shack in Hampton, Virginia arrived at work this week to find chains over the door. Employees in Omaha were abruptly sent home in the middle of their shifts. Joe’s Crab Shack locations are closing around the country, and employees are being given little to no warning.
Landlords may be to blame as much as Landry’s.
When a chain goes bankrupt, landlords have the right to terminate leases, and it seems that the Landry’s buyout didn’t come fast enough for some locations.
More bad news
Meanwhile, Dine Equity, owner of Applebee’s and IHOP, announced Thursday that they intend to close 160 restaurants, far more than previously estimated. They plan to shut down between 105 and 135 Applebee’s locations and 20 to 25 IHOPs. A major bummer for workers there, but not a big loss in the big scheme of Dine Equity’s holdings.
Those holdings include 3,700 total restaurants between Applebee’s and IHOP combined.
John Cywinski, president of Applebee’s, explained that they are mainly closing older restaurants that are in locations that no longer have high traffic, as well as restaurants at which “a rather high percentage of guests [were] not satisfied with their experience.”
Richard Dahl, interim CEO of Dine Equity, says the move is a way of “investing in the empowerment of our brands” while also cutting costs and simplifying operations.
Restaurant rescue
Do closings at Joe’s, Applebee’s, and IHOP indicate a general downward spiraling trend for restaurants? Not necessarily. Americans remain hungry for moderately-priced deep-fried appetizers, stacks of flapjacks, and happy hour specials.
The closings are more indicative of the game of musical chairs played by corporate leadership as Joe’s attempt to bounce back from bankruptcy and as Dine Equity passes the buck to a new CEO.
#ClosedCrabShack
