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Report: Lone Star Steakhouse closes 19 units

Chain told local papers that the restaurants were unprofitable

Lone Star Steakhouse & Saloon has reportedly closed 19 of its underperforming casual-dining restaurants in multiple states.

The move leaves Lone Star with 112 locations across 31 states, according to the chain’s website. The Plano, Texas-based chain did not return a call to confirm the multiple news reports about the closures by press time.

Howard Terry, Lone Star's director of marketing, told a reporter for the Bay City Times in Michigan that the 19 closed restaurants had been unprofitable and that the company did not anticipate any additional closures. The Bay City Times was reporting on the closure of three of the seven Lone Star restaurants in Michigan.

A report in The Morning Call in Allentown, Pa., cited the closure of a Lone Star restaurant in Pennsylvania’s Whitehall Township and the earlier closing of one of the chain’s units in Pottstown, Pa.

Once publicly owned, Lone Star operated more than twice as many restaurants as it has today — 253 units — in its 2005 fiscal year. But negative sales trends led it to begin shedding units the following year, and it was acquired in December 2006 by an affiliated company of Dallas-based Lone Star Funds.

Lone Star Funds also controls the Sullivan's, Del Frisco's Double Eagle Steak House, and Texas Land & Cattle Co. chains.

Lone Star Steakhouse & Saloon had estimated fiscal 2009 systemwide sales of about $253 million, down from estimated sales of $314.5 million in 2008, according to the latest Nation’s Restaurant News Top 200 census. At its high-water mark, in fiscal 1998, the chain had U.S. systemwide sales of about $523 million from 265 locations.

Contact Alan J. Liddle at [email protected].

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