By Jeremiah McWilliams of the The Atlanta Journal-Constitution, published 2:44pm Feb 16, 2010
The chief executive of Hooters of America Inc. said in a letter to employees that banks and firms are exploring ways to invest in and partner with the Atlanta-based restaurant chain.
Stories in the New York Post last week indicated Hooters might be putting itself up for sale to private equity groups or other financial firms. The restaurant chain is known for its buxom waitresses, orange hot pants and spicy wings.
In a letter to real estate and food industry executives, Brooks acknowledged that the estate of his father, Hooters founder Bob Brooks, is “engaged in the financial market to find the right partner or partners” for Hooters. But he sought to tamp down “rumors” and “speculation” about a pending sale.
Since the death of Bob Brooks nearly four years ago, Hooters has been controlled by his estate. Several personal representatives, including Coby Brooks, oversee the execution of the estate.
The goal now, Coby Brooks wrote, is to meet estate tax obligations and conform to Bob Brooks’ commitments to his beneficiaries. Brooks said those discussions have caused stories to surface about a pending sale.
“Some change is inevitable,” Brooks wrote. “But if you hear rumors about going public, me leaving, etc., they are simply and completely not true. … I want you to know my intentions are to ensure our company has the leadership, capital and cultural strength to grow for another 25 years and beyond.”
The company did not comment when asked by The Atlanta Journal-Constitution to elaborate on the letter.
Sales at the privately held restaurant chain exceed $1 billion, according to industry estimates. The 26-year-old chain has more than 450 locations in 43 states and 26 countries. Sixty-eight percent of its customers are male, mostly between the ages of 25 and 54.
Casual dining chains have been battered by the recession. Hooters and competitors have been hurt by the decline in businessman travel and convention business, said Ron Paul, CEO of research firm Technomic.
“They’re not immune to the downturn in casual dining,” said Paul, who estimated that Hooters’ sales might be down by double-digit percentages. “There’s no reason to believe they are doing better than the competition.”