Landry's Sells Joe's Crab Shack
On July 6, 2021, Landry's Inc. announced its decision to sell its casual dining chain, Joe's Crab Shack, to private equity firm, Kelly Companies. This move comes as part of Landry's efforts to focus on its more high-end restaurant brands and divest its less profitable businesses. While the sale price has not been disclosed, it is believed that the deal will close by the end of 2021.
The History of Joe's Crab Shack
Joe's Crab Shack was founded in Houston, Texas in 1991 by entrepreneur Joe Decker. The restaurant quickly became known for its laid-back atmosphere and seafood-centric menu, featuring dishes like buckets of crab, shrimp, and crawfish, as well as burgers and sandwiches. In 2006, Landry's Inc. acquired Joe's Crab Shack for $192 million, making it part of a restaurant empire that includes brands like Bubba Gump Shrimp Co., Morton's The Steakhouse, and Rainforest Cafe.
The Sale of Joe's Crab Shack
The decision to sell Joe's Crab Shack is not entirely surprising. Landry's has been focusing on its more upscale restaurant brands in recent years, acquiring high-end concepts like Mastro's Steakhouse and Vic & Anthony's Steakhouse, and investing in its existing luxury properties. While Joe's Crab Shack has been a staple in the casual dining sector for many years, it has struggled in the face of changing consumer tastes and increased competition from fast-casual seafood chains like Red Lobster and Captain D's.
The sale to Kelly Companies, a private equity firm based in Utah, is expected to provide fresh investment and new ideas for the struggling chain. The firm has a history of acquiring distressed businesses and turning them around, and has experience in the restaurant industry through its ownership of other casual dining brands like Black Bear Diner and Texas Roadhouse. However, it remains to be seen what changes Kelly Companies will make to Joe's Crab Shack's menu, decor, and overall concept.
What This Means for Joe's Crab Shack Employees and Customers
One of the biggest question marks surrounding the sale of Joe's Crab Shack is what will happen to its employees. According to reports, the chain has around 5,000 employees across its 58 locations in the United States. While it is unclear whether Kelly Companies will retain all of these employees or make cuts, the firm has stated that it plans to "reinvent and reinvigorate" Joe's Crab Shack with a focus on "cultivating and nurturing the brand's strengths."
As for customers, it is likely that Joe's Crab Shack will continue to operate in its current form for the time being. However, if Kelly Companies does decide to make significant changes to the brand, customers may notice differences in the menu, decor, and overall experience at the restaurant. It is also possible that Joe's Crab Shack could expand to new markets or even internationally under new ownership.
Final Thoughts
Overall, the sale of Joe's Crab Shack represents a new chapter for the beloved casual dining chain. While it has faced challenges in recent years, its new ownership could bring fresh ideas and investment to revitalize the brand. Only time will tell what changes will be made and how they will be received by employees and customers alike.
