Montreal-based MTY Food Group, the company behind restaurant chains including Thai Express, Mr. Sub and Manchu Wok, plans to close 68 underperforming restaurants over the next six to nine months after reporting lower profit and sales.<\/p>\n
The company announced the closures Friday as it released its second-quarter financial results.<\/p>\n
MTY chief executive Eric Lefebvre said the restaurants slated for closure lost more than $10 million over the past year and that the company decided to shut them down following a review of its operations.<\/p>\n
\u201cThis is an important step for MTY,\u201d Lefebvre told analysts during a conference call Friday morning. \u201cThe decision will reduce our store count in the near term, but we believe it is the right long-term action for the business.\u201d<\/p>\n
The planned closures will not affect any locations in Quebec, Lefebvre told The Gazette. While a handful of restaurants elsewhere in Canada are slated to close, he said the majority of the affected locations are in the United States.<\/p>\n
Lefebvre said he could not provide additional details about which locations are slated for closure or how many jobs could be affected.<\/p>\n
During Friday\u2019s conference call, Lefebvre said about 45 to 50 of the planned closures are Papa Murphy\u2019s locations, a U.S.-based take-and-bake pizza chain owned by MTY. He added that some restaurants could close as early as next week.<\/p>\n
MTY reported net income of $15.4 million for the quarter ended May 31, down from $57.3 million during the year-earlier period. Revenue fell to $279.9 million from $304.9 million, while same-store sales declined 2.1 per cent.<\/p>\n
Lefebvre blamed the weaker results on continued pressure on consumer spending and a difficult business environment.<\/p>\n
The company said closing the restaurants and ending their leases is expected to cost between $10 million and $12 million.<\/p>\n
MTY operates more than 7,000 restaurant locations across Canada, the United States and internationally under more than 80 banners.<\/p>\n