- Del Frisco's Restaurant Group plans to lay off 12% to 15% of general and administrative positions that will generate a savings of $3 million in 2019 and $5 million on annualized run-rate basis, according to a press release.
- The company has been working to reduce redundancies following its acquisition of Barteca Restaurant Group, according to Restaurant Business.
- "We have now opened six of our planned eight restaurant openings for 2019 and, with the Barcelona and bartaco integration nearly complete and new IT systems now in place ahead of our original schedule, we are making necessary adjustments to move forward in a more dynamic way that will not impact our future growth plans," CEO Norman Abdallah said in the press release. "There is no change to our long term disciplined growth target of 10% to 12% new restaurant openings every year, which we are firmly on track to hit in full year 2019."
Layoffs have been somewhat rare in an industry struggling with an ongoing labor shortage, but they have been happening at company headquarters of late, especially when it comes to shoring up losses. Long John Silver's cut about 20 positions in February from its Louisville, Kentucky headquarters. Jack in the Box laid off 66 corporate employees at its headquarters in January, and Starbucks laid off 5% of its corporate employees last year.
Restaurant groups are also under pressure from investors to improve expenses and improve revenues, and Del Frisco’s hasn’t escaped scrutiny. The company started reviewing different strategies in December, including a possible sale, to try and improve shareholder value. Abdallah said in the release that the company will continue to work with its financial and legal advisors to review its strategic alternatives.
Del Frisco's is also balancing its sluggish financials and foot traffic with its growth strategy, especially when it comes to Barteca Restaurant Group. It plans to grow bartaco from 19 to 30 locations by 2020, targeting 300 units nationwide in the long term. It also aims to open three Barcelona Wine Bars for this year.
The company will need to start growing sales significantly soon to show investors that its strategies are working. Although its revenue increased 64.1% to $120.4 million during the first quarter of this year, primarily from the addition of revenue from Barteca Restaurant Group, its comparable restaurant sales grew only 1.3% and customer count declined systemwide by 0.6%, according to an earnings release. Growth numbers like that aren’t likely to wow investors.