THIS NEW HOUSE IHOP MAKES OVER MORE THAN MENU.

Byline: Evan Pondel and Andrew Blazier Staff Writers

DUARTE - When a new IHOP restaurant opens here next week, it may catch longtime patrons of the famous pancake house by surprise.

Gone is the classic white building with blue trim and an A-frame roof, no more the nostalgic diner feel that oozed decades of Americana.

Instead, visitors to the new International House of Pancakes in Duarte will be treated to a style that is, of all things, Mediterranean.

``We're walking away from the blues,'' said Everardo Loyo, director of operations for Santa Monica-based Landmark Restaurant Group, which operates six IHOP franchises in Los Angeles County. ``This is a little more inviting and conducive to repeat visits.''

Analysts say IHOP's new restaurant design and a new national menu rolled out this week could certainly help the company stave off competition from rivals like Denny's. But IHOP will be hard-pressed to outpace its performance during the last two years.

For example, in the first quarter this year, IHOP reported that net income decreased to $10.1 million from $10.9 million reported in the same period a year ago. The culprit: modest same-store sales growth of 0.6 percent, which was not enough to offset increases in administrative costs that rose 14.1 percent in the first quarter of 2005.

Cash flow from operating activities also declined in the first quarter, registering $14.9 million, nearly $5 million less than the company reported a year ago. ``Things did slow down in the first quarter, but that's in part because of a tougher comparison (between 2004 and 2005 results),'' said Michael Gallo, analyst with C.L. King & Associates Inc. in New York. ``The family dining industry has been getting a little more competitive, too.''

Landmark, which holds IHOP franchise rights for all of California, has committed to opening 47 stores statewide by January 2008. The company has doubled its restaurant holdings each of the last two years and expects to open four more locations this year.

Expansion, a new restaurant model and a new menu may be too much all at once, warns analyst Mark Smith with Sidoti & Co. in New York.

IHOP unveiled this week national menu with 13 new items. Among them, Shrimp Caesar Salad, Supreme Ham & Three Cheese Omelet and Grilled Cod Hollandaise. IHOP is also touting its new Sourdough Cheese Grillers, an item some analysts say is far from impressive.

``I'm a little worried about them pushing too much and getting away from breakfast items,'' Smith said. ``But then again, I'm more of a home-grown country guy who is more impressed with IHOP's pot roast.''

Evan Pondel, [phone]

evan.pondel(at)dailynews.com

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Photo:

(color) An example of the new look at International House of Pancakes is the restaurant scheduled to open in Duarte next week.

James Carbone/Special to the Daily News