The company said funds will help restaurant rehire employees and reopen units.
BJ’s Restaurants announced an injection of capital Friday in the form of a $70 million investment from Act III Holdings.
CEO Greg Trojan said the deal will enhance BJ’s liquidity and strengthen its ability to rehire employees and re-open dining rooms within social distancing guidelines.
“The capital raise announced today, together with other recent actions we have taken, will enhance BJ’s liquidity and strengthen our ability to welcome back our team members and reopen dine-in service at our restaurants in accordance with the social distancing and safety protocols mandated by state and local governments to ensure the health and safety of our guests and team members," Trojan said in a statement. "BJ’s maintains a strong concept and brand, with a long-term focus on sales driving and productivity initiatives, future growth prospects, and the daily commitment of our valued team members. We believe this investment will prove invaluable as we reopen our dining rooms and continue to deliver the delicious food, dining experiences and guest service and hospitality that consumers have come to love and expect from BJ’s.”
Act III is owned by Ron Shaich, the founder and former CEO of Panera Bread, who sold the bakery-café chain to JAB Holding Company in 2017 for $7.5 billion. Act III was responsible for facilitating Cava’s $300 million acquisition of Zoës Kitchen in 2018.
“I have long admired BJ’s differentiated position within casual dining and the quality of its execution,” Shaich said in a statement. “The result is a company that is generating some of the highest average unit sales and guest traffic metrics in the industry. This is a testament to the strength and tenure of BJ’s management team, from the Restaurant Support Center down to the restaurants themselves. BJ’s ability to stay ahead of changing consumer trends, while remaining true to its brand heritage, provides a platform to ignite future growth, and the opportunity to more than double its current restaurant footprint. In sum, we have made this investment to help ensure BJ’s has the resources and capabilities to thrive well into the future.”
The restaurant’s comps were down 82 percent in the week ending March 24, but have since lifted to negative 70 percent in the week ending April 21. The improvement has been supported by a weekly growth in off-premises business in the mid-teens. In the week ending April 21, BJ’s earned $31,716 in average off-premises sales, up from $11,402 in the week ending March 17.
The company, which is set to announce its Q1 earnings next week, laid off 16,000 hourly employees, 200 restaurant managers, and 40 Restaurant Support Center employees. Trojan and other leaders took a 20 percent pay cut and Restaurant Support employees making over $100,000 had their salary reduced. BJ’s is currently burning about $2.5 million per week. As of April 24, 205 of the casual-dining chain’s 209 restaurants were open.
Bank of America Securities served as exclusive financial adviser on the deal and Elkins Kalt Weintraub Reuben Gartside LLP served as legal advisor to BJ’s Restaurants. Sullivan & Cromwell LLP served as legal advisors to Act III.