Bloomin’ Brands has sold its Korea business in a refranchising deal for $49.4 million, according to a filing with the Securities and Exchange Commission Monday afternoon.
The buyer and other details of the sale are unknown. But the filing said that the market will be operated like a franchise once the deal is closed in the Tampa-based company’s fiscal third quarter later this year.
Bloomin’ said it would take an impairment charge of $9 million to $13 million in the current quarter related to the deal.
Bloomin’ Brands operates 74 Outback Steakhouse locations in South Korea. Yet it had operated many more — the company closed 36 locations there in late 2014 and early 2015 after sales declined in the country.
Company executives had indicated that its efforts in South Korea had been working. Same-store sales increased 6 percent in the third quarter last year, for instance, but quickly decelerated to flat in the fourth quarter. Same-store sales fell 5.6 percent in the first quarter ended March 27 this year.
“It’s a very, very challenged market,” CFO Dave Deno said on the company’s first quarter earnings call in April.
Bloomin’ did not respond to requests for comment on Monday.
Bloomin’ is hardly the only major U.S. restaurant company rethinking operations in Asia amid weakness there in recent years.
Yum! Brands, the operator of KFC, Pizza Hut and Taco Bell, is spinning off its mostly company-operated China business, which will operate like a franchisee of the mostly franchised Yum. McDonald’s Corp., meanwhile, wants to sell its operations in many Asia markets as part of a broader refranchising strategy. Korea is among them.
Bloomin’ Brands operates or franchises more than 1,500 casual dining restaurants, including Outback Steakhouse, Carrabba’s, Bonefish Grill and Fleming’s Steakhouse & Wine Bar.