Noodles will offer 2 new dishes: Thai green curry shrimp dish and Adobo pork or chicken
Broomfield-based Noodles & Co. said Thursday it will close 55 under-performing restaurants and revamp its menu in an effort to revive sluggish sales and improve its bottom line.
The fast-casual pasta chain didn’t detail which restaurants it will close out of the 510 in operation at the end of 2016, saying that information would be released in coming weeks. Noodles, however, is shuttering more than a tenth of its locations and will also slow new openings.
“Many of these under-performing restaurants opened recently in new markets,” Dave Boennighausen, Noodles’ chief operating officer and interim CEO, said in a conference call.
Even as it closes stores, the company expects to open a dozen or more locations this year, but only in what Boennighausen described as “lower-risk markets.” The company also wants to shift a handful of company-owned stores to franchise owners, who currently run 15 percent of locations.
Noodles expects to pay upwards of $29 million to terminate leases, cover real estate broker fees and pay severance to employees. The company also expects to write off $30.5 million to $31.5 million to reflect lower asset values.
Fast-casual restaurant chains of all types have struggled with sluggish growth in recent months. Noodles’ reputation took an added hit in May 2016 after the disclosure of a large data breach that exposed the credit card and debt card information of its customers going back to January of that year. SELCO Community Credit Union in September sued the company for the breach.
Boennighausen said the company recorded an $11 million charge linked to the data breach in the fourth quarter of 2016 and could face another $5 million in costs. To help fund that effort, the company said Thursday it had privately placed $18.5 million worth of preferred shares and warrants.
To help boost sales, the company will replace two slower selling items on its menu with a Thai green curry shrimp dish and an Adobo pork or chicken dish. Rather than offering meat as an add-on to its dishes, the company will list its menu items with protein to boost the average purchase.
In October, the company streamlined its menu from 28 to 19 items by cutting out its sandwich line and eliminating its Buff Bowls, which replaced pasta with rice.
By ALDO SVALDI
