In a significant move, Shake Shack, the popular burger chain, announced the closure of nine of its U.S. locations due to underperformance. According to a filing with the Securities and Exchange Commission on August 27, these closures are primarily concentrated in California, where several locations are set to shut their doors.
The California closures include Shake Shack outlets in Oakland, Bunker Hill in downtown Los Angeles, downtown Culver City, Koreatown, Silver Lake, and at the Westfield Topanga mall. In addition to these, the company is closing locations in Polaris, Ohio; Montrose, Texas; and the Houston Galleria.
Shake Shack indicated that the decision to close these locations was influenced by “changes” in their respective areas, leading to their underperformance. The affected stores have until September 25 to cease operations. However, the company is offering management the opportunity to transfer to nearby outlets or receive up to 60 days’ pay as part of the transition.
Despite these closures, Shake Shack remains focused on growth. The company operates 501 stores worldwide, with 350 in the United States, and does not foresee additional closures in the near future. In a statement CEO Rob Lynch emphasized the company’s continued expansion efforts.
“After careful consideration, we’ve made the tough decision to close a small group of Shacks due to various factors, including underperformance. We remain focused on supporting our team members through this transition and look forward to continuing our growth, opening many more locations across the country,” Lynch stated.
Shake Shack is currently in a phase of considerable growth, with plans to open 40 new company-owned Shacks and an additional 40 licensed Shacks by the end of the year.
Red Lobster Closes 23 Locations Amid Bankruptcy Proceedings
In related news, Red Lobster, a well-known seafood restaurant chain, recently announced the closure of 23 additional locations as part of its ongoing Chapter 11 bankruptcy proceedings. The closures, which affect locations across 14 states, including California, Minnesota, Virginia, New York, and Florida, are part of the company’s restructuring efforts aimed at stabilizing its finances and ensuring long-term viability.
The Red Lobster closure in California is in La Mesa, with other affected locations spread throughout the country. The company has been a mainstay in American casual dining for decades but has faced financial challenges leading to the current restructuring under bankruptcy protection.
As both Shake Shack and Red Lobster navigate their respective closures and restructuring efforts, the restaurant industry continues to experience shifts driven by market conditions and changing consumer preferences.
