Tuesday, June 18, 2013

Cheesecake Factory Succeeds with Excess

Cheesecake Factory's David Overton (LA Times)
The Cheesecake Factory is a restaurant of superlatives.  Extravagant interiors, giant-sized portions, skinnylicious diet menus balanced with slabs of cheesecake in myriad flavors, the chain routinely reaches the top spot on surveys of favorite American restaurants.  Meanwhile, nutritionists point to several dishes on the Cheesecake Factory menu as examples of the very worst high-sugar, high-fat, and massively calorie-laden excesses that any restaurant chain has to offer.  But put it all together and it adds up to an excess of success for the Overton family business, which started in Detroit more than half a century ago and now operates in 40 states, Kuwait, Dubai and in Asia.

Hunter Communications Original News Source:
Los Angeles Times

Link to article:

Excerpt: "There are 162 Cheesecake Factory restaurants in the U.S., along with 11 eateries under the Grand Lux Cafe brand and one RockSugar Pan Asian Kitchen.

Cheesecake Factory locations gross, on average, more than any other chain in the U.S., Overton said. The Honolulu branch pulls in $20 million a year.

The company made its market debut in 1992, when Overton agreed to an initial public offering — in large part because he wanted to help his mother retire. The chain enjoyed a 25% revenue growth each year through 2007.

But when the recession hit, Overton said, he 'took too long to realize that it was here to stay.'

The company's stock plunged from roughly $30 a share in 2007 to $5 a share in late 2008 before management moved to scale back store openings. In recent years, the chain has had to raise food prices slightly to keep up with the increase in commodity costs.

'I should have reacted quicker,' Overton said.

The company has since embraced caution. It has no plans to spin off Grand Lux and RockSugar as separate public companies, and offers few bargains or advertisements across its restaurants. Overton said his business only participates in social media because "that's the future."

But with the stock now near an all-time high at $41.46 a share, Cheesecake Factory is slowly easing back into expansion mode. It opened its first licensed international location in Kuwait last year, recently launched an eatery in Dubai and has several more on the way in Asia.

Barring remote states such as Alaska and the Dakotas — where the chain 'probably won't go' — Overton said the Cheesecake Factory is also growing in the 40 states with current locations. Many of the new openings are in the suburbs, where stores smaller than the customary 10,000-square-foot urban restaurants are 'working out well,' he said.

These days, the Cheesecake Factory offers more than 200 menu items and more than 30 cheesecakes. It's a far cry from opening day, when the menu was two pages and featured a dozen cheesecakes.

'When I trust my own taste buds, that's what people like,' he said. 'I'm not a gourmet and I don't try to be. The common man likes my taste.' "

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