Friendly will close almost a quarter of its restaurants.
Friendly's President and Chief Operating Officer John L. Cutter, explained that the announcement followed months of research, analysis and discussion. "The reorganization and subsequent reduction in force is complete. We look forward to devoting our energy on providing 100% Guest Satisfaction, 100% of the time, and effectively executing our goal of being 'brilliant at the basics.' This includes continued improvements in customer service and a single-minded focus on exceeding our guests expectations."
The first restaurants closed were are all company-owned and included 27 in New York, 12 in Connecticut, 11 each in Massachusetts and Ohio, five each in New Jersey and Pennsylvania, three in Maryland, two in Rhode Island, and one each in Florida, New Hampshire, Virginia, and Vermont.
Friendly has not yet released the locations of the 70 additional restaurants that are still to be closed. The company operates 604 restaurants in a total of 15 states. In January, Friendly sold 29 of its restaurants in New York to a franchisee based in Rochester, NY Currently about 100 of its restaurants are owned by franchisees.
Shares of Friendly Ice Cream were trading down below $4 on the NASDAQ Stock Market when the announcement of the closings was made, well off their 52-week high of $10. Friendly said it expected an $18 million pretax writedown of property and equipment and a $12 million restructuring charge in the first quarter, because of the closings and an additional $8 million pretax savings because of its headquarters restructuring. The company reported total revenues of $709 million during 1999, up from $678 million in 1998, and a net income of $400,000 or 5 cents a share for 1999, compared to a loss of $5 million or 67 cents a share for 1998.
The 65-year-old chain also announced a correlating reorganization of the its field and headquarters organization designed to appropriately service and support the needs of the remaining restaurants -- both company-owned and franchised -- and their customer base. The reorganization includes the elimination of 110 administrative and managerial jobs, including 40 out of a total of 400 at its corporate headquarters in Wilbraham, MA. Overall, Friendly employs 24,000.
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|Title Annotation:||Friendly Ice Cream Corp.|
|Comment:||Friendly will close almost a quarter of its restaurants.(Friendly Ice Cream Corp.)|
|Publication:||Ice Cream Reporter|
|Article Type:||Brief Article|
|Date:||Apr 20, 2000|
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