NRD Capital’s search for a permanent Ruby Tuesday CEO is over.
Ray Blanchette joined the casual-dining brand on Monday, replacing the interim CEO Aziz Hashim, who is NRD Capital’s founder and managing partner.
Atlanta-based NRD finalized its $335 million purchase of Ruby Tuesday in late December and took the chain private. The fund expected to be looking for the right permanent CEO fit until later this year, but it only took a few weeks to put the puzzle pieces together with Blanchette.
“We’re very fortunate that Ray’s timing coincided because he was just part of the sale of [Au Bon Pain] to Panera, which closed last week,” Hashim told NRN at the ICR Conference in Orlando.
He joked, "The timing worked out, and we’re not going to let go of talented management just because it didn’t fit the word ‘interim’ correctly.”
In addition to leading Au Bon Pain through its acquisition, Blanchette’s experience includes an eight-year run as CEO and president of Ignite Restaurant Group. At Ignite he took the company public in 2012 and rebranded Joe’s Crab Shack.
“As the NRD team conducted its search for a permanent CEO, we sought out an executive with a proven track record of successful restaurant management, combined with innovative thinking, extraordinary team-building skills and a shared philosophy on the importance of strong unit level performance. Ray Blanchette checks all those boxes,” said Hashim in a statement.
So, how do you fix Ruby Tuesday?
Ruby Tuesday has struggled with declining sales and traffic. In the first quarter, ended Sept. 5, the chain’s traffic fell 9 percent, revenue fell 15 percent and same-store sales fells almost 6 percent.
A day into his new job, Blanchette talked to NRN about the long road ahead at the Maryville, Tenn.-based casual-dining chain.
“I think we have to do a combination of things. We need to make a different noise in the space. Everyone knows what’s been going on in bar and grill in the last decade or so; it seems there is top line pressure in particular,” said Blanchette.
“We need to find a way to compete differently.”
The quality of operations, the restaurant experience, the right people in the right roles and menu improvement will be important to the brand’s success, he said.
One thing Blanchette certainly won’t be doing is ditching Ruby Tuesday’s core customers. In fact, he couldn’t think of a single successful company turnaround that was based on deserting one customer base for another.
“You have to bring your core with you,” he said.
Blanchette compared the challenge of a restaurant turnaround to building an airplane while it’s in the air.
Luckily Blanchette won’t be piloting the Ruby Tuesday plane solo. NRD Capital Management LLC., founded by longtime Popeyes, Domino’s and Checkers franchisee Hashim, plans for the relationship to be collaborative between the fund and the chain.
The operator-focused fund looks for brands that need improvement but also have a lot of room for growth. Ruby Tuesday’s iconic name and “good bones,” represent a big opportunity for NRD, according to Hashim,
NRD also named industry veteran and turnaround Stephanie Medley chief strategy officer to assist Blanchette in the turnover. Medley has experience working with turnaround brands, as well as TGI Fridays, KFC, and Fuzzy’s Taco Shop, among others.
As of Dec. 1, Ruby Tuesday owned and franchised 596 Ruby Tuesday restaurants in 41 states, 14 other countries and Guam. Of those, the company owns 541 Ruby Tuesday restaurants and franchises 55 units.
Hashim started NRD in 2014 and earlier this summer the firm closed on a $100 million fund. The company has previously acquired Fuzzy’s Taco Shop and Frisch’s Big Boy.