Restaurant chain Steak 'n Shake has permanently closed 57 restaurants amid slumping sales during the coronavirus pandemic.
The Indianapolis-based chain of casual eateries announced in the latest earnings report by its parent company, San Antonio-based Biglari Holdings Inc., that it has closed 51 corporate-owned locations and six franchise-owned locations.
Biglari Holdings reported impairment charges of $10.3 million as a result of closing the 51 locations, according to the report.
"The COVID-19 pandemic had an adverse effect on our restaurant operations, thereby resulting in the evaluation of company operated restaurants for recoverability,'' the report states.
The company also sold one location to a franchisee and 10 locations to operating partners, reducing its total number of restaurants to 553, which is down from 624 a year ago.
Steak 'n Shake has been offering takeout, delivery and drive-thru service since closing its dining rooms nationwide on March 17 as a result of the global health crisis. In addition, 62 company-owned stores were temporarily closed.
The company also noted that the ongoing pandemic may cause further issues. Burger chains like Wendy's have already been affected by beef shortages caused by COVID-19 outbreaks at several meat processing facilities around the country.
"However, the COVID-19 pandemic could cause disruptions to our supply chain,'' the report states. "Moreover, we cannot predict how the outbreak of COVID-19 will alter the future demand of our products."
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Steak 'n Shake, which was founded in 1934 and acquired by Biglari Holdings in 2008, also reported a loss of $7.9 million in the first quarter, which was actually less than its $13.3 million loss from the same period last year. Revenue from sales at Steak 'n Shake also dropped 34% to $114.1 million, according to the report.
Biglari Holdings, which also owns companies in the insurance and oil and gas sectors, as well as Maxim magazine, reported a net loss of $137.9 million in the first quarter of this year ending March 31.