April 2008 Top Restaurant News

Here is some of the top industry news for the month of April:

Triarc Purchases Wendy’s

Nelson Pettz and partner Peter May of Triarc has purchased the hamburger chain, Wendy’s International in a $2.34 billion stock swap. Triarc who currently owns Arby’s is most notably known for its buyout of the beverage maker, Snapple in 1997 from Quaker Oats for $300 million and sold 3 years later for $1.5 billion. Last summer Triarc had offered $3.6 billion for Wendy’s, but several months later the economy started to tumble and so did Wendy’s sales. The buyout of Wendy’s will create a quick-service empire which will operate the franchise rights to 10,000 restaurants generating $12.5 billion with combined sales. The deal is expected to improve Wendy’s margins and improve efficiency as well as have an estimated $60 million in annual savings.

Chipotle Mexican Grill Posts 38% Profit Increase

First quarter net income increased by 38.9% to $17.9 million while revenue increased by 29.3% to $305.3 million. The rise in both net income and revenue is due to increased customer visits, more locations and menu price increases. The 730-unit fast casual chain is on track to open 130 to 140 units this year which will set a record for the company. Based on the current situation of the economy and high rising cost of food, Chipotle is clearly surviving where many other restaurant chains are beginning to cut back on planned openings.

Ruth’s Chris CEO Fired

CEO Craig Miller of the famous Ruth’s Chris Steak House was ousted as the fine-dining chain continues to slide. The company’s share price has dropped close to 70% during the past year. Miller was shocked at the Board of Directors’ decision and said there was no explanation given. However, several Board members had hinted their disappointment with Miller’s performance to meet financial goals by denying both Miller and his executive team bonuses last year. This past February, Ruth’s Chris reported a 61% profit decline for the fourth quarter and a 24% drop in profit for 2007. At one point when the restaurant chain was thriving, shares traded at more than $20US only a year ago, but today shares are at $7.39. Instead of improving the chain’s sales, many have questioned Miller’s decision to buyout Columbus, Ohio-based Mitchell’s Fish Market, a high-end seafood chain for $92 million. Currently, Ruth’s Chris Steakhouse has 121 locations worldwide and a new CEO has yet to be named.

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