Del Frisco’s Restaurant Group Inc. closed last weekend its two-year-old Del Frisco’s Grille unit in Palm Beach, Fla., a location that faced community challenges even before it opened.
The Southlake, Texas-based company, which also owns the Del Frisco’s Double Eagle Steakhouse and Sullivan’s Steakhouse concepts, took a $3.3 million non-cash impairment charge related to the closure in its third quarter ended Sept. 8. The company said Monday that it would incur one-time lease termination and closing costs during the fourth quarter.
"Despite our best effort, we were not able to make the Palm Beach Del Frisco's Grille restaurant as successful as other Grille locations," Mark S. Mednansky, Del Frisco's Restaurant Group CEO, said in a statement. As of Sept. 8, the company had 18 other Grille restaurants.
"We have therefore chosen to take decisive action to close the location so that we can focus on more profitable opportunities,” Mednansky said. “We continue to have complete confidence in the Grille concept and are looking forward to opening new restaurants in carefully selected locations.”
The Palm Beach Daily News reported Monday that Del Frisco’s Grille “had struggled to win approval from both town officials and residents since making its pitch to the Town Council in 2012.”
The company had originally asked for special exceptions and a parking variance for a 260-seat, 8,399-square-foot steakhouse in the town’s Royal Poinciana Plaza, but community opposition led it to scale that back to 218 seats in 7,732 square feet.
The council approved the restaurant but limited it to dinner only and required a “priority reservation concept” to give preference to town residents. The council also required after six months that the company provide proof that it was “town-serving,” which was defined as having at least 50 percent of customers living, working or staying in hotels in Palm Beach.
Del Frisco’s foreshadowed the closure in its 10K Securities and Exchange Commission filing earlier in the fall, when it noted the $3.3 million impairment charge and its decision that the carrying value of the Palm Beach location “exceeded its estimated future cash flows.”
On Tuesday, Del Frisco’s announced the promotions of three company leaders to new operations positions in each of its three brands.
• Kim Owens was named vice president for operations at Del Frisco’s Double Eagle Steakhouse. Owens has been with the brand for more than 15 years.
• Shang Skipper was named vice president for operations at Del Frisco’s Grille. Skipper was previously a regional manager with the Grille, and has been with the Del Frisco’s brand for nearly 14 years.
• Chris Rockwood was named vice president for operations at Sullivan’s Steakhouse. Rockwood has been with company for more than 17 years.
As of Sept. 8, Del Frisco’s owned and operated 49 restaurants in 22 states, including 12 Del Frisco’s Double Eagle Steakhouse restaurants, 18 Sullivan’s Steakhouse units and 19 Del Frisco’s Grille locations.
Contact Ron Ruggless at [email protected].
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