The company behind Ruth's Chris steakhouse just sold a seafood chain for $82 million less than it paid six years ago.
Ruth's Hospitality Group announced on Monday that the company agreed to sell Mitchell's Fish Market and Mitchell's/Cameron's Steakhouse to Landry's for $10 million. The deal includes all 21 restaurants and is set to close early next year.
Ruth's bought Mitchell's in early 2008 for $92 million, the first time the company ventured outside of the "Ruth's Chris" brand. When the recession hit, the restaurant chain struggled to meet expectations and turn a profit.
Even as Ruth's Chris recovered, Mitchell's failed to do so. Earlier in November, the company reported same-store sales for Mitchell's declined nearly 3 percent in the third quarter, while Ruth's Chris Steak house increased nearly 5 percent. Thus, it's unsurprising that Ruth's decided to return to solely focusing on what it does best: Ruth's Chris.
“While the Mitchell’s restaurants continue to be profitable and generate positive cash flows, the sale of these restaurants will enable us to direct all of our resources towards the continued growth and expansion of our flagship Ruth’s Chris Steak House brand,” Michael P. O’Donnell, Ruth’s Hospitality Group CEO, said in a statement. “We are confident that Mitchell’s will complement Landry’s existing seafood restaurant portfolio and are very proud of the effort put forth by all our hardworking “aFISHionado” teammates.”
The sale will leave Ruth's with 138 Ruth's Chris Steak House restaurants, about half of which are franchised. At Laundry's Mitchell's will join a roster of more than 500 restaurant concepts, including Bubba Gump Shrimp Co., Rainforest Café and Landry's Seafood.