Outback abruptly closed 21 restaurants
Outback Steakhouse closed 21 locations in October and just announced a turnaround plan.
By Jordan Valinsky, CNN
New York (CNN) — Outback Steakhouse abruptly closed 21 restaurants in October as it begins a “comprehensive turnaround strategy” to keep up with its trendier competitors.
Bloomin’ Brands, Outback’s parent company, disclosed in its earnings report Thursday that in addition to those closures, an additional 22 locations will not have their leases renewed and will shutter over the next four years.
Outback has 670 US locations remaining, according to its website. That’s roughly 10% fewer than a decade ago, when it had about 750 locations.
Bloomin’ Brands also announced that it will take a $33 million impairment charge for the closures and suspended its shareholder dividend to help pay for the turnaround plan.
Part of that initiative includes “service enhancements to deliver an exceptional guest experience,” reviving the 37-year-old brand to bring in more repeat customers, and expanding restaurant remodels, according to a press release.
“We believe our strategic plan will drive long-term, sustainable and profitable growth,” said Bloomin’ Brands CEO Mike Spanos.
Outback has been struggling for the past two years and hasn’t posted same-store sales until this quarter, when sales rose a meager 0.4%.
Meanwhile, Darden-owned LongHorn Steakhouse posted a 5.5% rise and Texas Roadhouse generate a 5.8% jump in sales in their most recent earnings reports.
Diners are becoming choosier with their dollars when going out, and are not spending money at chains that they don’t perceive as good value. That’s helped Outback’s rivals, which serve heaping portions; and other chains, like Chili’s and Applebee’s that are focused on value and deals.
Bloomin’ Brands (BLMN) stock rose more than 3% in premarket trading.
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