Ruth’s Hospitality, parent of Ruth’s Chris Steak House, and Chuy’s Holdings said Monday that they have each furloughed a large number of employees and temporarily closed restaurants due to the COVID-19 pandemic.
Ruth’s said that it furloughed a “significant number of field and home office” employees and temporarily closed 23 restaurants where takeout and delivery isn’t viable.
The salaries of non-furloughed employees, CEO Cheryl Henry, and the executive team were reduced. Non-employee board members chose to suspend payment of their compensation, as well. Some operational employees have been re-deployed to open locations to support takeout and delivery. Ruth’s operates more than 150 restaurants worldwide.
“The safety and well-being of our team members and guests is our priority in these challenging times. Our brand has a rich history of rising to the occasion and I am proud of our team’s response to this unprecedented situation,” Henry said in a statement. “Our management team and board of directors have taken significant measures to enhance our financial flexibility during this time which includes drawing down and expanding our credit facility, suspending our dividend, and materially reducing capital expenditures as we weather the challenges related to COVID-19.”
Chuy’s said it furloughed about 40 percent of its corporate and administrative staff and closed nine of its 101 restaurants. The remaining 92 have transitioned to takeout and delivery.
Compensation for board members was suspended and non-furloughed corporate and administrative staff, including senior management, will have their salaries reduced by 25 percent to 75 percent.
“We remain committed to ensuring that our loyal guests can continue to enjoy many of our freshly prepared, craveable Mexican-inspired offerings in the comfort and safety of their homes, given the ongoing restrictions on our dining operations,” said Chuy’s CEO Steve J. Hislop in a statement. “In these unprecedented times, I’m particularly grateful for the hard work and sacrifices our teams continue to make to service our communities. We stand by each one of our team members and all of our loyal guests and look forward to resuming normal operations at our locations as conditions permit.”
As of Friday, Ruth’s had $71.5 million in cash. In addition, the brand is suspending construction of restaurants and nonessential capital expenditures, which is expected to save more than $35 million. Financial guidance for 2020 was withdrawn and the quarterly dividend was suspended.
Chuy’s drew down the $25 million under its credit facility to boost its available cash to more than $28 million. The company withdrew financial guidance and canceled all nonessential capital expenditures for 2020, which were expected to range from $23 million to $30 million.
Several restaurant companies have announced major furloughs or layoffs in the thousands including The ONE Group Hospitality, Danny Meyer’s Union Square Hospitality Group, Cameron Mitchell Restaurants, Landry’s, J. Alexander’s, Golden Corral, Luby’s, and Craftworks Holdings.
