The parent company of Ruth’s Chris is dumping its Mitchell’s seafood and steak concepts by selling the 21 high-end restaurants to Landry’s Inc. for less than $500,000 per establishment.
The $10-million deal will swell the holdings of privately held Landry’s to about 30 full-service restaurant concepts ranging from its namesake seafood chain to Bubba Gump’s Shrimp, Rainforest Café, Saltgrass and Chart House. Most specialize in steak or seafood. The various chains encompass some 500 restaurants.
In addition, Landry’s owns the Golden Nugget casinos and several tourist destinations, including Tower of the Americas in San Antonio and Pleasure Pier in Galveston, Texas.
“While the Mitchell’s restaurants continue to be profitable and generate positive cash flows, the sale of these restaurants will enable us to direct all of our resources towards the continued growth and expansion of our flagship Ruth’s Chris Steak House brand,” said Michael P. O’Donnell, president and CEO of Ruth’s Hospitality Group Inc.
The company took a $9.3-million write-down for the Mitchell’s/Cameron’s group in the third quarter, and warned shareholders at that time about possible further impairment charges.
O’Donnell said at the time that Ruth’s Hospitality Group viewed the Mitchell’s/Cameron’s group as entrants in the polished casual segment, a pricing level below the fine-dining market served by Ruth’s Chris. A number of polished casual concepts, including the Brio and Kona Grill chains, have seen a slowdown in sales.
In disclosing the sale to Landry’s, Ruth’s also noted that it intends to buy back stock shares.
The Mitchell’s and Cameron’s concepts were the brainchildren of Columbus, Ohio, restaurateur Cameron Mitchell, who sold what were then 19 units to Ruth’s Chris in 2008 for $94 million. Mitchell has since started several other full-service chains.