Ruby Tuesday Inc., which has struggled with declining same-store sales and profits, is cutting 50 corporate jobs and has hired a consultant to reduce other costs.

The company said the 50 positions eliminated were at Ruby Tuesday’s Restaurant Support Center in Maryville, Tenn., where the operator is based.

Ruby Tuesday, which last month saw its chairman resign and reported a steep drop in first-quarter same-store sales, said this was “a first step” in restructuring and reviewing its cost structure.


RELATED
Ruby Tuesday chairman resigns
Ruby Tuesday challenges raise investor concern
More casual-dining restaurant news


“These organizational changes were implemented to ensure we are strongly positioned to invest in brand repositioning initiatives,” said James J. “JJ” Buettgen, Ruby Tuesday’s president and chief executive, who also assumed the role of chairman with the resignation of Matthew Drapkin in late October.  

“We are aggressively focused on lowering our cost structure with no dilution to the guest experience,” Buettgen added in a statement late Wednesday.

Ruby Tuesday expects to trim general and administrative expenses by $6 million a year starting in fiscal 2015. The company will take a charge of about $2.2 million in the second quarter, which began Sept. 4, and the impact for the second half of fiscal 2014 would be about $2.5 million in reduced expenses.

Ruby Tuesday said it had also hired a consulting firm to help it identify and implement other cost-cutting initiatives in the areas of costs of goods sold, restaurant operations and administrative expenses. Executives said they would update shareholders on those initiatives in the company’s second-quarter earnings release in January.

In the past month, several analysts and a bond-rating firm lowered ratings on Ruby Tuesday after it reported a net loss of $22.2 million during its Sept. 3-ended first fiscal quarter, driven by same-store sales declines of 11.4 percent at company-owned restaurants and an 8.4 percent drop-off at domestic franchised restaurants.

The company predicts same-store sales declines in the high-single digits in the second quarter with improvements in the third quarter and positive same-store sales in the fourth quarter.
Buettgen said a menu renovation introduced in August, which included pretzel burgers, flatbread appetizers and a green bean tempura appetizer, would be slow to show results. The menu changes are part of an ongoing brand repositioning.

Ruby Tuesday operates 703 Ruby Tuesday units and franchises 75 restaurants. It owns and operates 21 Lime Fresh locations and franchises eight additional outlets.

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless