In just one recent week alone, three restaurant companies filed for chapter 11 bankruptcy protection - Cosi (OTCPK:COSIQ), Rita Restaurant (Don Pablo), and Garden Fresh Corp. (Souplantation, Sweet Tomatoes). At least five other operators have done the same this year.
Rattled by so many filings in such a short time frame, industry experts now say to expect more bankruptcies, closings, consolidations, and management shake-ups. Famous Dave's of America (NASDAQ:DAVE) is in the midst of closing many of its barbecue restaurants and last week named its fourth new CEO in four years.
Late this summer, Ruby Tuesday (NYSE:RT) announced plans to close almost 100 locations, and Bob Evans (NASDAQ:BOBE) in April shuttered 27 restaurants on top of 20 closed last year.
Behind the problems: Restaurant supply for years up until 2014 had been growing even as foot traffic hadn't. While restaurants have seen net closings since, other options have been drawing away even more customers - think meal-kit delivery services like Blue Apron, better prepared meal choices at supermarkets, and improved offerings at convenience stores.
"Restaurants are competing against a lot of those other choices, not just restaurants,” Darden (NYSE:DRI) CEO Eugene Lee told investors earlier this month.
Famous Dave’s of America (NASDAQ:DAVE) names Michael Lister as the new CEO to replace Adam Wright.
Wright has left the company and is no longer on the board.
Lister is an accomplished restaurant industry executive with more than 35 years of experience, including a 19-year history with Famous Dave’s of America. He will also fill the COO role at the restaurant operator.
Board member Adam Wright, who has been serving as Famous Dave's (DAVE) CEO since June (following the resignation of Ed Rensi), has been named the restaurant chain's permanent CEO.
Wright: "I'm passionate about barbeque, and am eager to rebuild this company by focusing on our guests, collaborating with the franchisees, and improving our company culture. I look forward to continuing to work with the Board, Famous Dave Anderson, the franchise partners, and the dedicated team to drive long-term growth and per-share shareholder value."
The news comes with Famous Dave's trading less than $0.50 above a 52-week low of $6.70.