Amid Slump, Ruby Tuesday Explores All Options
Times are tough in the casual dining segment, as evidenced by slumping same-store sales by many restaurants, changing consumer habits and a massive onslaught of fast-casual competitors. The latest player in this category to struggle is Ruby Tuesday, which announced it is “exploring strategic alternatives in order to maximize shareholder value,” including a potential sale or merger.
To this end, the Maryville, Tennessee-based company has retained UBS as its financial advisor to assist in the process of determining what comes next for national restaurant brand.
“We believe now is the right time to explore strategic alternatives that have the potential to position the business for long-term success and to carry that [45-year] legacy forward,” said Stephen Sadove, non-executive chairman of Ruby Tuesday. "We are confident the process will identify the best strategic avenues to maximize the value of our business and achieve the best result for our shareholders, franchisees, and team members."
Ruby Tuesday is in the beginning stage of the strategic and financial review, and no assurance can be given as to its outcome or timing, the company said in its press release. Ruby Tuesday also said it does not intend to make any further public comment regarding the review until it has been completed.
The news comes as many restaurants are announcing their third quarter 2017 results. Same-store sales declined 4 percent and its cash balance dipped to $32.6 million.
While some casual-oriented restaurants have held strong in the current environment, Ruby Tuesday is one of several brands struggling to regain footing in the current restaurant environment.
Watch this space for updates when they become available.