The restaurant chain is reportedly up for sale. Can babes and wings cut it in this economy?
Posted by Kim Peterson on Thursday, February 11, 2010 1:28 PM
Hooters waitress. Credit: (© Gil Cohen Magen/Reuters)The Hooters restaurant chain is reportedly up for sale, desperate for cash as business has fizzled.
The restaurants — known for waitresses wearing short-shorts and down-to-there tank tops — could sell for more than $250 million, analysts tell The New York Post.
The Post reports that Hooters has hired North Point Advisors, a San Francisco investment bank, to help with the sale. The restaurant isn’t officially commenting on rumors that it has been shopping itself to private-equity firms.
What went wrong for Hooters? Well, the company doesn’t make the smartest moves.
Plunging sales: Hooters’ same-store sales are in steep decline, one source tells the Post. In this economy, many folks just don’t have the cash for wings and beer.
Questions about management: We’ll learn more about the way Hooters runs things on Sunday, when CBS features the company for an hour on the reality show “Undercover Boss.”
Already, it doesn’t look good. The show reportedly found one supervisor telling waitresses that they had to play his “reindeer game” if they wanted to leave early that day. According to the Post, the game meant burying their faces in plates of food without using their hands, all while the supervisor screamed, “Hoooo, doggie!”
Um, I’ve lost track of what I was talking about. Oh yeah, problems at Hooters.
Casino troubles: The Hooters casino in Las Vegas has been losing revenue since it opened in early 2006. Cash flow dropped to the point that a buyer wanted to take the Hooters name off of the place and rebrand it as a boutique hotel. But that deal fell through. Hooters just gets a royalty fee for the use of its name, the Post reports, but that source of revenue may be drying up.
Hooters Air: Need I say more? Rest in peace.
Business-travel woes: Hooters tied itself to the business-travel market in some ways, placing some of its 450 restaurants near convention centers and other business meeting sites.
So when the economy put the brakes on business trips, Hooters took a hit, too, one analyst tells Marketplace’s Jeremy Hobson.
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