Ignite Restaurant Group said it will sell Romano’s Macaroni Grill at a big loss to keep the troublesome chain from sapping resources for Ignite’s stronger brands, Brick House Tavern and Joe’s Crab Shack.
Ignite had purchased Romano’s two years ago from Brinker International for $55 million, when the chain consisted of 210 units. It is selling the now-167-unit brand for $8 million in cash to Redrock Partners LLC. The buyer is a holding of a Phoenix-based real estate company called Rimrock Partners.
“We continue to believe in the underlying strengths of the Macaroni Grill business. Unfortunately, the brand was unable to deliver, in a timely manner, on the milestones we established,” said Ignite CEO Ray Blanchette. “As a result, we decided that it was in the best interest of Ignite and our shareholders to sell the brand. The divestiture of Mac Grill will enable us to focus our resources on building momentum at Joe’s Crab Shack, while growing Brick House Tavern & Tap.”
The deal, which is expected to close within 30 days, will essentially halve Ignite’s restaurant portfolio. As of the close of the third quarter of 2014, the company’s chains extended to 160 stores.