ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Saturday, December 16, 1995 TAG: 9512180058
SECTION: BUSINESS PAGE: A8 EDITION: METRO
DATELINE: ROCKY MOUNT, N.C.
SOURCE: ASSOCIATED PRESS
Hardee's Food Systems, the nation's fourth-largest fast-food chain, on Friday announced retrenchment plans that include selling its unprofitable Roy Rogers restaurants.
Hardee's also said it plans to reduce the number of restaurants in its flagship Hardee's system by about 4 percent next year. At the end of the third quarter of 1995, there were 3,494 Hardee's restaurants in 41 states and nine foreign countries. It did not identify which outlets will close.
As part of a restructuring plan, the chain said it will close a plant in Rocky Mount, N.C., putting 232 people out of work in 60 days. In addition, 47 employees at its corporate headquarters in Rocky Mount will be laid off.
``We are determined to make Hardee's a more focused company,'' said Stephen McManus, who took over as president and chief executive officer on Sept. 1.
Sales at Hardee's and Roy Rogers' restaurants were down 6 percent during the first nine months of 1995 compared with the same period a year earlier. The Roy Rogers' restaurant division is expected to post a loss from operations of $28 million in 1995, the company said.
There are 450 Roy Rogers restaurants in the United States, primarily on the East Coast. Hardee's bought the division from Marriott Corp. for $365 million in cash in 1990.
Hardee's had problems with the acquisition. It first tried to convert the Roy Rogers' chain into Hardee's outlets, then had to spend $4 million to reconvert them when patrons began disappearing along with the Roy Rogers' signs.
Hardee's already has agreed to sell 45 Roy Rogers restaurants in the New York area to Wendy's International Inc., and is negotiating the sale of 24 other Roy Rogers restaurants in that market.
Buyers are being sought for the balance of the Roy Rogers business, which includes 178 company-operated restaurants in the Baltimore-Washington area.
The restructuring ``appears to mean they're going to focus on becoming a growing concern again in the burger category,'' said Ron Paul, a fast-food industry analyst with Technomic Inc.
Hardee's currently has 9.5 percent of the national market in the fast-food restaurant business. McDonald's is the leader, with a 41.5 percent market share; followed by Burger King, 16.9 percent; and Wendy's, 10.8 percent, Paul said.
To make inroads, Hardee's will have to focus on marketing and menu, he said.
To pay for the reductions, Hardee's will take a $239 million special charge against its fourth-quarter earnings. Almost all of the charges relate to a writedown of Roy Rogers' assets, the company said.
Hardee's fourth quarter 1994 earnings were $25 million. Earnings for all of 1994 were $97 million. For the first nine months of 1995, the company earned $35 million on revenue of $1.38 billion. The company is owned by Imasco Ltd., a Montreal consumer products and services company.
``With the intense competition we are facing, we have a lot of work to do to get this business back on a growth track,'' McManus said. "Before we can move forward, we have to put our business on a much stronger footing, which we are doing.''
Hardee's said it will close the Rocky Mount plant of its Fast Food Merchandisers manufacturing and distribution subsidiary, resulting in the loss of 232 jobs.
The company is also cutting the work force in its own and the FFM corporate offices by 47 employees, or about 10 percent.
LENGTH: Medium: 72 lines ILLUSTRATION: PHOTO: AP As part of a restructuring plan, Hardee's Foodby CNBSystems says it will close a plant in Rocky Mount, N.C., putting 232
people out of work in 60 days.