Outback Menu Goes Leaner On Prices

Tampa Tribune:

Facing massive losses, Outback Steakhouse‘s parent company is pushing back against the recession by introducing a low-priced menu, planning a major advertising blitz and slashing costs.

The new menu will include 15 meals for less than $15, the company said Monday in a conference call with analysts.

Still, the challenges continue to mount for Tampa-based OSI Restaurant Partners. A franchisee that owns 41 Outback Steakhouses in California has defaulted on $33 million in loans, according to new documents filed with the Securities and Exchange Commission.

OSI had guaranteed the franchisee’s loans and was forced to pay Bank of America the amount of its back debt. The company in default, called T-Bird Nevada, is controlled by Tommy Shannon, a Floridian who once led an effort to buy the Tampa Bay Buccaneers.

OSI and T-Bird have filed lawsuits against each other concerning the default.

On Monday, OSI revealed it lost $739 million on revenue of $3.9 billion in 2008. Most of that in essence is a paper loss.
OSI’s business has deteriorated so much that it wrote down the value of its “goodwill,” which is the value of its brand name, stature in the restaurant industry and other intangible assets.

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