Chuy’s, Ruth’s Chris adopt extraordinary measures

Staffs have been furloughed, salaries have been cut, and cash has been pooled.
chuys sign
Photograph: Shutterstock

Chuy’s and Ruth’s Chris Steak House have joined a host of other casual-dining chains in adopting what’s become the full-service sector’s usual response to the COVID-19 crisis: Shut restaurants where takeout and delivery aren’t feasible, furlough hourlies, cut back headquarters staff and lower the salaries or hours of employees still working. The differences are in the particulars.

Chuy’s has closed nine of its 101 restaurants, with the rest narrowing their operations to takeout and delivery. All are corporately operated.

About 40% of corporate and administrative employees have been furloughed. Those still employed have had their base compensation lowered by 25% to 75%, the company said.

Chuy’s has drawn down the $25 million remaining in its revolving credit facility, giving it a total of $28 million in cash and cash equivalents on hand, the company said.

“We believe these actions will allow us to navigate the near-term challenges of the COVID-19 virus while maintaining the long-term health of our business,” said CEO Steve Hislop.

Ruth’s Chris’ parent, Ruth’s Holdings, said it was “curtailing operations” at 23 restaurants that aren’t feasible for takeout and delivery. It revealed in a securities filing that a majority of employees, both in the field and at headquarters, have been furloughed. The exact number of affected employees was not divulged.

The company said it will continue to pay the employer’s share of health insurance and pick up the employee’s contribution for furloughed workers for 60 days.

The pay of unaffected employees has been cut 10% to 30%, according to a Securities and Exchange Commission filing. The base pay of CEO Cheryl Henry and Executive Chairman Michael O’Donnell have been cut 50%.

Non-employee directors have agreed to waive their board-service fees.

Ruth’s drew another $30 million from an accordion feature of its credit facility, giving it $71.5 million in cash at hand, the company said.

Ruth’s Chris operates or franchises about 150 full-service steak restaurants worldwide.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content


Red Lobster gives private equity another black eye

The Bottom Line: The role a giant sale-leaseback had in the bankruptcy filing of the seafood chain has drawn more criticism of the investment firms' financial engineering. The criticism is well-earned.


Beverage chains are taking off as consumers shift their drink preferences

The Bottom Line: Some of the fastest-growing chains in the U.S. push drinks, even as sales at traditional concepts lag in growing delivery and takeout business. How can traditional restaurants get in on the action?


Brands need to think creatively as the industry heads into a value war

The Bottom Line: Giving customers meal options they can afford will be key to generating traffic this year. But make sure those offers can generate a profit.


More from our partners