OVERLAND PARK, Kan. Applebee’s International Inc. said it is closing 24 of its 528 company-operated namesake restaurants to bolster earnings and cash flow and improve returns on invested capital. Ten of the stores are located in New England, a notoriously difficult market for many restaurant chains.
The company said it expects to take a pre-tax charge of $13.5 million to $15.5 million for the first quarter for the closures. The contraction will also cost $9.5 million to $12.5 million in lease termination costs. Applebee’s indicated that 19 of the units will be shuttered in the first quarter.
The closings would pare the chain to about 1,918 outlets. The company said it usually shutters one or two company units per year.
In disclosing the move, Applebee’s noted that it has also sold one of its corporate aircraft, leaving it with a lone prop plane, and is selling its headquarters here and moving into a facility in Lenexa, Kan. The new building will be sold and leased back, it said.
The steps are the latest efforts by Applebee’s to bolster the value of its stock, whose price has languished. The restaurants tagged for divestiture were identified during a financial analysis undertaken as part of the chain’s previously announced plan to sell itself or seek other value-boosting initiatives.