Tuesday, April 4, 2017

Update: Brick House/Joe's parent considering bankruptcy

UPDATE (4/4/17): Ignite Restaurant Group Inc., parent to the Joe’s Crab Shack and Brick House Tavern + Tap chains, has named a new CEO as it looks for a way out of its financial problems, the company said Monday. In a filing with the federal Securities and Echange Commission (SEC), it said the business could be sold as one piece or as separate sales of the two brands, but a filing for bankruptcy protection remains an option.

(Originally published 3/17/17)

Any time a company is delisted by the Nasdaq Stock Exchange, its very existence hangs in the balance. And, as a consumer I worry, too -- about the quality of what I'm being served by a company desperately looking to save money.

That just happened to the obviously troubled Ignite Restaurant Group, owner of the Brick House Tavern + Tap and Joe's Crab Shack brands. It acknowledged this week that its stock price has declined so much that it finally was delisted. While it still can trade its stock, it is extremely difficult to do so when not part of the Exchange.

Ignite went public in 2012, but got into deep financial do-do the very next year when it purchased the shaky Romano's Macaroni Grill chain for $55 million. Industry analysts say that was the beginning of what might eventually be the end of Ignite. The once-strong Romano's Macaroni Grill lost 95% of its value in a period of just seven years, and Ignite sold it off for a token $8 million just 18 months after purchasing it.

Curiously, Romano's Macaroni Grill is hanging in there, with 129 locations in 30 states, including one in Wolf Road Shopper's Park in Colonie. Meanwhile, just north of that location at the entrance to Latham Farms, Ignite's effort to establish a successful Joe's Crab Shack flopped and the jury still is out on the Brick House it put in its place.

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