The news out of casual dining hasn't been good, but today could be a preview of how bad it may still get: Ruby Tuesday, once a pacesetter of the segment, said it will take a write-off to close about one-tenth of company stores, or 70 units in total. Another 35 to 40 sites are for sale, but it was not clear if those locations are being peddled to franchisees or pruned altogether. The announcement called them "surplus properties."
Forty stores will be shuttered during the quarter that ends in February, and the remaining 30 will be divested "over the next several years," according to the statement.
In addition, the company said it'll take a write-off of $19 million for the quarter that just ended to cover impairment to goodwill. In plain English, the company's intangible worth just isn't as high priced as it was, and it's taking the hit now. To put it in perspective, Ruby posted a net income of $285,000 for the quarter ended Sept. 2--before two months that were widely described as among the worst the restaurant industry has known.
Ruby Tuesday operates about 700 restaurants and franchises about 230 more.