Ruby Tuesday is planning to convert about six of its underperforming casual-dining units into three other concepts it either already owns or has development rights for, the company said Friday.
The conversions will center around three brands: Jim ’N Nicks Bar-B-Q, Truffles Cafe and Wok Hay, Ruby Tuesday spokesman Rick Johnson said. The company acquired the now two-unit Wok Hay Asian bistro concept three years ago, and it has purchased development rights for the 26-unit regional Jim’N Nick’s Southern barbecue chain and three-unit upscale-casual Truffles brand.
Check averages are between $10 and $12 at Wok Hay and $18 at Truffles, which compares with a $12 check average at Ruby Tuesday. No check average information for Jim’N Nick’s was available at press time.
Johnson said the conversions would begin slowly, with the first one turning over within the next two to three months from an underperforming Ruby Tuesday unit to a Jim’N Nick’s restaurant in Knoxville, Tenn. Another Ruby Tuesday restaurant, in the Atlanta area, will be converted into a Truffles location within the next six to nine months, he said.
The company also is targeting stores in the area around Hilton Head, S.C., where Truffles is based, for future conversions, Johnson said.
“We need to do other concepts that are different from the Ruby Tuesday brand,” he said. “As far as Jim’N Nick’s is concerned, they have barbecue, do chicken and ribs, a more regional Southern cuisine. We think this is something we can develop in other parts of the country besides the South. It has a very different positioning than Ruby Tuesday.”
Johnson said the upscale-dining aspect of the Truffles concept allows Ruby Tuesday “to look at locations where that kind of concept is a better fit.”
The company is looking into converting more of its Ruby Tuesday stores, Johnson said, but he did not offer details on how many and the timetable for the additional conversions. He did say the planned conversions would cost around $400,000 each.
“[The cost] is not significant; it’s typically less than half a million dollars — the ballpark range is about $400,000 — depending on the location and size of the restaurant," he said. "It is not a very capital-intensive conversion.”
The company said the conversions have the potential to increase average unit volumes by $1 million.
Johnson said Ruby Tuesday has no plans to acquire the Jim’N Nick's or Truffles brands at this time.
“That is not something we’re considering right now and there are no current plans for that,” he said.
Separately, the company said Friday it named Dan Dillon to the post of senior vice president of brand development. Dillon, who most recently served as chief marketing officer for the Outback Steakhouse chain, will be responsible for overseeing Ruby Tuesday’s brand strategy, development, marketing, research, culinary and purchasing.
The news of the conversions and Dillon’s appointment follow Ruby Tuesday's report of its fourth quarter results, which included a 0.3-percent rise in corporate same-store sales, its best same-store sales performance in nearly four years. Click here to read more about Ruby Tuesday's latest results.
In a conference call with investors Friday, Ruby Tuesday said it was encouraged by the response it has received for its new menu, which it will roll out systemwide next month. Items include complementary fresh-baked garlic cheddar biscuits, a series of Fit 'N Trim items that each contain fewer than 700 calories, new fresh vegetable offerings and an expanded brunch lineup, according to a transcript of the conference provided by SeekingAlpha.com.
Contact Elissa Elan at [email protected].
