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Cheesecake closes 12-year-old restaurant chain Rock Sugar.

Cheesecake Factory plans to close RockSugar

Casual-dining company says Southeast Asian Kitchen concept will shut by end of the year

The Cheesecake Factory Inc. will be closing its RockSugar Southeast Asian Kitchen in Los Angeles, the company said in an earnings release Thursday.

The Calabasas Hills, Calif.-based casual-dining company said RockSugar, which the company created and opened in June 2008, “is scheduled to discontinue operations at the end of the year.”

The company also closed one Grand Lux Café during the third quarter and said it recorded a pre-tax impairment of assets and lease termination expense of $10.4 million, $5.4 million of which was cash lease-termination expense associated with one Grand Lux Cafe that closed in the quarter and the RockSugar location.

The Cheesecake Factory, in its business update, said about 90% of the company’s restaurants across its concepts, including 187 Cheesecake Factory locations, were operating with reopened indoor dining rooms with limited capacity in accordance with local mandates.

“On average, Cheesecake Factory restaurants with reopened dining rooms are operating at 50% capacity,” the company said. “Approximately 7% of the company’s restaurants across its concepts, including 17 Cheesecake Factory locations, are operating with reopened patios with social distancing in accordance with California and Toronto dining restrictions.”

Two Cheesecake units were operating an off-premise only model, and five locations across the company’s concepts were still closed because of the COVID-19 pandemic.

“We have continued to drive sales at The Cheesecake Factory restaurants despite mandated capacity restrictions as many of our guests have been eager to return to our restaurants and we have continued to sustain strength in the off-premise channel,”  said David Overton, Cheesecake Factory CEO and chairman, in a statement.

Overton said the company had “seen a continued sales recovery” at North Italia and the Fox Restaurant Group concepts, which it acquired in 2019.

For the third quarter ended Sept. 29, The Cheesecake Factory’s net income swung to a loss of $28.3 million, or 76 cents a share, from a profit of $16.1 million, or 36 cents a share, in the same period last year. Revenues declined 11.7%, to $517.7 million, from $586.5 million in the prior-year quarter.

Third-quarter same-store sales were down 23.3% at Cheesecake Factory and down 22% at North Italia, which had 23 restaurants open at the end of the quarter.

The Cheesecake Factory owns and operates 295 restaurants throughout the United States and Canada under brands that include The Cheesecake Factory, North Italia and a collection within the Fox Restaurant Concepts subsidiary. Internationally, 26 Cheesecake Factory restaurants operate under licensing agreements.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

TAGS: Finance
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