Ruby Tuesday is eager to get its turnaround started. Just a few weeks after naming Aziz Hashim interim CEO of the struggling casual dining chain, the brand handed Ray Blanchette the permanent tag Tuesday. Announced during the ICR Conference in Orlando, Florida, Ruby Tuesday said Blanchette’s history of revitalizing fledging brands makes him an ideal fit for this role.
The Maryville, Tennessee-based brand was taken private December 21 in a deal with NRD Capital valued at $2.40 per share. The acquisition was first announced October 16 after a lengthy “strategic review” process. The $146 million purchase ($335 million if you include debt) was NRD Capital’s largest to date and resulted in founder Hashim taking the CEO reins from Jim Hyatt. The former Domino’s, Checker’s, and Popeyes franchisee started NRD in 2014 and has also taken stakes in Fuzzy’s Taco Shop and Frisch’s.
"Ruby Tuesday is an iconic American brand with dedicated employees who deserve the best possible leadership” Hashim said in a statement. “As the NRD team conducted its search for a permanent CEO, we sought out an executive with a proven track record of successful restaurant management, combined with innovative thinking, extraordinary team-building skills and a shared philosophy on the importance of strong unit level performance. Ray Blanchette checks all those boxes, and on behalf of everyone at NRD, I want to be the first to welcome Ray to the Ruby Tuesday team. We look forward to a bright future working together.”
Blanchette is taking over as CEO immediately, the company told CNBC, and he’ll have his work cut out for him. Ruby Tuesday has closed more than 100 restaurants since August and posted a net loss for nine consecutive quarters, as well as revenue declines, year-over-year, for the past five years. For the past fiscal year, total revenue was down 12.8 percent to $952 million. Same-store sales dropped 1.6 percent in the fourth quarter compared to 3.7 percent in Q4 2016. They declined 3.1 percent for the year compared to 1.4 percent. As of December 1, there were 596 Ruby Tuesday restaurants in 41 states, 14 foreign countries, and Guam. Of those, 541 are company operated and 55 franchised.
Blanchette helped revitalized Joe’s Crab Shack during an eight-year run as CEO, including taking parent company Ignite Restaurant Group public in 2012. During his tenure, he also developed the Brick House Tap & Tavern concept, and oversaw the rebranding of the company from Joe's Crab Shack to Ignite Restaurant Group. He was replaced as CEO of Ignite by Bob Merritt in 2015. Stephanie Medley, who has worked with TGI Friday’s and KFC, is also coming on as chief strategy officer.
Blanchette was most recently CEO of Au Bon Pain, which was purchased by JAB Holding’s Panera Bread in November.
"I believe in the Ruby Tuesday brand and its potential for a turnaround story,” Blanchette said in a statement. “Having spent my career in the casual dining segment, I understand how difficult it’s become for brands to differentiate themselves amongst the competition. Like NRD, I don’t believe that is the case with Ruby Tuesday, and with the right product offerings, messaging and execution, the Company can once again be top-of-mind with global diners. I want to thank Aziz and the team at NRD for this fantastic opportunity, and look forward to getting people excited about Ruby Tuesday.”
Blanchette started at Carlson Restaurants, then parent company of TGI Fridays, as a manager-in-training in the late 1980s. He held roles as vice president of USA Franchise Operations, vice president of operations for the company's East Division, and executive director of its International Division serving Europe, Africa, and the Middle East. He left to become president and chief operating officer of Pick Up Stix, Inc. before joining Au Bon Pain in June 2016.
“This is kind of a homecoming for me. I'm excited to now lead a brand that I've competed with for decades,” Blanchette told CNBC.
As for how Blanchette plans to bring Ruby Tuesday back, he said he plans to innovate the chain’s menu while staying true to its core. He doesn’t, however, just want to shrink it, like many casual brands have done in recent months. He also told CNBC technology and third-party delivery won’t be major drivers as Ruby Tuesday looks to solidify its four-walls experience. In the past, Ruby Tuesday has spoken of a "Plan to Win" strategy meant to revitalize sales. Read more about it here.