LOS ANGELES--(BUSINESS WIRE)--A performance report on restaurant company Grill Concepts, Inc. (GCI), charting the firm’s slower-than-projected growth since 2008, was released today by UNITE HERE Local 11, the hospitality workers’ union in Los Angeles and Orange counties.
GCI, the parent company of the Daily Grill, The Grill on the Alley and the Public School, has seen a net decrease in the number of outlets it operates under different brands, while some of its competitors have flourished, according to the report, titled “Grill Concepts: Is Growth Still on the Menu?” Despite a reported goal to expand, GCI’s total locations went from 32 in 2009 to 30 in June 2015. According to press reports in 2007 and 2008, the company’s then-CEO projected the opening of “four to six” new units annually, possibly adding ultimately 250 restaurants to its portfolio.
The report also compiles a number of events in GCI’s recent history:
In 2009, due to the economic slowdown, GCI announced the following
- A 10% pay cut for executives and 100% elimination of compensation for directors
- Closing restaurants and temporarily halting its expansion program
- Deregistering from NASDAQ to avoid costly reporting fees and trading on the OTC Market
- GCI stock fell from a high of $14.50 in 1996 to close to 18 cents in 2013, after which the company was also deleted from the OTC Market.
Nevada gaming-industry billionaire Charles Mathewson’s stock purchases
between September 2008 and September 2009 made him the majority owner.
- Mathewson’s investments supported the company’s operations and debt payments.
Growth strategies pursued have yielded limited results:
- Despite launching new brands, the total number of GCI eateries has fallen since 2008.
- A 2001 agreement to jointly develop restaurants with Starwood Hotel and Resorts Worldwide (NYSE: HOT), owner and/or operator of over 1,200 properties worldwide, has resulted in a net six units based at Starwood hotels.
- While GCI’s Public School brand has grown to five current locations since 2011, the number of Daily Grill locations has fallen from 24 to 17 since 2009.
- Certain of GCI’s rivals have expanded during the same time period that GCI experienced a net loss in restaurants. For example, Darden Restaurants saw 30% growth, The Cheesecake Factory saw 22% and Del Frisco’s/Sullivan’s saw 100% growth.
“GCI’s uneven expansion in recent years may be of importance to developers looking to complement a mixed-use project with a company that has a sustained track record of growth,” said Jesus Hermosillo, author of the report. Please contact Mr. Hermosillo for a copy of the report.
UNITE HERE Local 11 represents more than 20,000 workers employed in hotels, restaurants, airports, sports arenas and convention centers throughout Southern California.