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DineEquity to cut 100 jobs, IHOP president to step down

DineEquity to cut 100 jobs, IHOP president to step down

DineEquity Inc. on Tuesday announced that Jean Birch, president of the IHOP chain, will step down effective Aug. 27, and the company will cut about 100 jobs as it moves to a more efficient franchising model.

The company said it expects to generate about $10 million to $12 million in annualized savings as it shifts to a more efficient shared services platform between its IHOP and Applebee's brands, which will include a headcount reduction.

Julia Stewart, DineEquity’s chair and chief executive, will assume day-to-day leadership of IHOP an provide strategic direction until a replacement for Birch is found, the company said.

“I want to thank Jean for her dedication and leadership,” said Stewart in a statement. “She has made lasting contributions to the brand and has identified ways to expand our breakfast platform. I wish Jean all the best on her future endeavors.”

The news came as the Glendale, Calif.-based operator and franchisor of the IHOP and Applebee’s brands reported net income available to common stockholders for the second quarter of $15.9 million, or 88 cents per share, compared with a loss of $284,000, or a loss of 2 cents per share, for the same quarter last year.

Revenues for the quarter declined 14 percent to $229.4 million, in part because the company has almost completed its strategic plan to turn Applebee’s into a 99-percent franchised chain. Three transactions for the sale of 137 Applebee’s locations in Virginia, Missouri, Indiana and Michigan are pending, but the company expects they will close in the third or fourth quarters.

IHOP has been struggling over the past few quarters with sinking sales, a trend that continued into the second quarter. The brand's domestic same-store sales for the second quarter were down 1.4 percent, reflecting a decline in traffic that was offset by a higher average guest check, the company said.

However, same-store sales at domestic Applebee’s locations systemwide increased 0.7 percent, which the company said reflected a higher guest check average that was partially offset by a drop in traffic.

Birch’s departure follows other executive changes earlier this year. Patrick Lenow, IHOP’s fomer executive director of communications, left the company in March. Jim Peros, former senior vice president of operations at IHOP, retired in March.

On the Applebee’s side, Shannon Johnson, the former vice president of culinary and menu strategy, left the company to join McDonald’s USA as director of culinary innovation in May.

DineEquity franchises and operates 3,500 restaurants under the IHOP and Applebee’s brands in 18 countries.

Contact Lisa Jennings at [email protected].
Follow her on Twitter: @livetodineout

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