Restaurant chain Ruby Tuesday has tried several new ideas to recover from
the Great Recession but the company might be better off getting into the real estate business, a Bloomberg report suggests.
A story on Bloomberg.com says restaurant companies such as Maryville-based Ruby Tuesday and Lebanon, Tenn.-based Cracker Barrel Old Country Store “can make more money selling their own real estate than food.”
“The 10 biggest U.S. restaurants that sell for less than the value of their property, plants and equipment trade at 70 cents on the dollar,” Bloomberg says. The report notes that Ruby Tuesday owns $1 billion worth of fixed assets, “twice its market value.”
Activists investors are taking a hard look at both companies.
In a preemptive move earlier this summer, RT cut a deal with Becker Drapkin Management founders Steven Becker and Matthew Drapkin, offering them seats on the board in exchange for an agreement to NOT nominate their own slate of independent directors at next month’s annual meeting.
Even so, the Oct. 5 annual meeting should be interesting. A RT spokesman declined to tell Bloomberg if the company would consider selling some of its real estate.
The Bloomberg report discusses why selling off property makes sense to investors looking to score quick buck.