Chain executives take salary cuts as company shores up financial position
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Ruth’s Chris Hospitality Group, Inc., has closed 23 of its roughly 135 Ruth’s Chris Steakhouse restaurants in the United States as one of several measures to shore up its financial position, the company said Monday.
In a release announcing the changes, the company said takeout and delivery were not viable at those locations. It also said it had furloughed a “significant number of field and home office team members,” and reduced the salaries of those still on staff, including executives. It added that some employees involved in operations have been redeployed to work in takeout and delivery of the restaurants that are still open.
Non-employee company directors have also suspended their annual retainer fees.
Like many restaurant companies, Ruth’s Chris has closed all of its dining rooms in the face of the Covid-19 pandemic, as required by law in most jurisdictions, but has continued with takeout, as well as delivery through third-party delivery partners, in markets where those sales cover the cost of the management that’s staffing those locations. Its Ruth’s Anywhere program offers a limited menu including two salads, six entrees, a steak sandwich, a burger and three sides. The chain is also offering 50% discounts on wine for takeout.
In a press release, Ruth’s Chris Hospitality president and CEO Cheryl Henry detailed other measures the company is taking.
“The safety and well-being of our team members and guests is our priority in these challenging times,” she said. “Our brand has a rich history of rising to the occasion and I am proud of our team’s response to this unprecedented situation. Our management team and Board of Directors have taken significant measures to enhance our financial flexibility during this time which includes drawing down and expanding our credit facility, suspending our dividend, and materially reducing capital expenditures as we weather the challenges related to COVID-19.”
On March 16, the company had drawn down its remaining cash reserves under its $120 million revolving credit facility. Then on March 26 it drew down an additional $30 million, giving it a total of around $71.5 million in cash on hand, it said.
Also like many publicly traded restaurant company’s Ruth’s Chris Hospitality has withdrawn its 2020 earnings guidance “due to the ongoing uncertainty around the duration and severity of the Covid-19 pandemic.”
Contact Bret Thorn at [email protected]
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