Biglari Holdings Inc. has closed 57 Steak ‘n Shake units permanently in the wake of the coronavirus pandemic, the company said in federal filings for its first quarter ended March 31.
Sardar Biglari, CEO and chairman of the San Antonio-based holding company, said the company closed dining rooms in all its restaurants in the first quarter because of the COVID-19 pandemic.
The Steak ‘n Shake closures included 51 company-owned restaurants and six franchised units, the company noted in its Securities and Exchange Commission filing. The company took an impairment charge of $10.3 million in the first quarter because of the closures and pandemic’s impact.
Amid city and state restrictions on dining rooms to stem the spread of the coronavirus, “most of our restaurants remained open with limited operations such as takeout, drive-thru and delivery,” Biglari said, adding a warning about future operations.
“The COVID-19 pandemic could cause disruptions to our supply chain,” he said. “Moreover, we cannot predict how the outbreak of COVID-19 will alter the future demand of our products.”
Biglari, which owns the Steak ‘n Shake and Western Sizzlin’ brands, closed most of its dining rooms on March 17 and the remainder closed by the end of the first quarter, the company said.
In the first quarter ended March 30, Biglari’s restaurant holdings narrowed losses to $7.9 million from $13.3 million in the same period last year. Revenues fell 34.3% to $114.1 million from $173.8 million in the prior-year quarter.
As of March 31, Biglari reported 605 restaurants, including 553 Steak ‘n Shakes and 52 Western Sizzlin’ units. The company owned 306 Steak ‘n Shake restaurants and four Western Sizzlin’ units, and the remainder were operated by franchisees or franchise partners.
The company reported 71 fewer Steak ‘n Shake units and seven fewer Western Sizzlin’ restaurants than in the same quarter a year ago.
Biglari temporarily closed 44 Steak ‘n Shake locations in spring 2019 and announced it would seek franchise partners to operate those units. At the end of the first quarter this year, it designated 62 restaurants as temporarily closed.
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