Robert Simons held his cupped hands on either side of his eyes and squinted as he peered through the glass of the Steak ‘n Shake restaurant in Centennial.
His eyes quietly inventoried the dozens of stacked chairs, tables and assortment of other accouterments that make up the innards of the famed steak-burger chain, then muttered his displeasure at what he saw inside the darkened building.
“Damn,” the Parker resident said.
Not eight years ago, drive-thru lines at what was then the state’s first Steak ‘n Shake snaked around the building off South Quebec Street, with waits topping five hours.
Today, the celebrated building is shuttered, a sign on a window boldly declaring the space is for lease.
Though spokespersons for Steak ‘n Shake owner Biglari Holdings in San Antonio did not return calls from The Denver Post, the location was one of more 100 corporate-owned Steak ‘n Shake restaurants that were “temporarily closed” last year.
The temporarily closed sign on the front door was recently replaced with the more emphatic “for lease” placards on the windows.
It’s unclear if the location is one of four the company declared in a U.S. Securities and Exchange Commission filing it had closed permanently during the third quarter of 2019.
“I liked this place,” Simons said on a frosty December morning, hoping to stop by for some coffee and maybe cheese fries. “Damn shame it’s done. I didn’t know.”
Despite the auspicious beginning in November 2011, the location was a troubled one, with a protracted public court battle between the company and an Aurora family that held the franchise. They said they were being treated unfairly; Steak ‘n Shake said the family went rogue.
Ultimately Kathy and Larry Baerns lost their court fight and were forced to hand over more than $500,000 in legal judgments, along with the keys to the store. The same for their other location in Sheridan.
The Baernses filed for bankruptcy in 2017, according to court records, with more than $3.6 million in debts that include the Steak ‘n Shake judgments and a $2.5 million loan they received from Thomas Caruso, the original holder of the Centennial franchise.
“We’re broke now. My husband is 80 and I’m 70 in May,” Kathy Baerns told The Denver Post in a telephone interview. “And because of all of this, we’re back to work at a time we were expecting to retire, to leave the businesses to our children.”
Baerns said she ate at Steak ‘n Shake restaurants growing up in Illinois, and looked forward to leaving a similar legacy in Colorado.
“It’s just too bad this happened, and I’m resigned to the fact we don’t have it any longer,” she said.
Steak ‘n Shake chose to run the Centennial and Sheridan locations on its own, one of more than 100 other restaurants the Indianapolis-based company did not franchise to others.
The Sheridan location remains open today.
When the Centennial restaurant reopened in November 2013, there was nearly as much fanfare as its initial opening with sub-freezing temperatures having little effect on the faithful who waited for the doors to open – in part because the first 10 in line got free lunch for a year.
But troubles lingered, not just in Centennial but chain-wide.
Since 2017, the chain experienced dramatic declines in sales, which ultimately dug into profits. Biglari Holdings CEO Sardar Biglari publicly said the burger brand had “failed customers by not being fast and friendly.”
“Despite our unwavering dedication to product quality and low prices, we erroneously stayed with equipment and kitchen design that was ill-suited for volume production,” he told shareholders in a letter. “The effect has been high-cost, labor-intensive slow service.”
Biglari chose to temporarily close 106 stores — Centennial’s among them — and in mid-2018 sought franchise partnerships at a paltry $10,000 each. By September 2019, customer traffic across the chain was down nearly 15% and revenues were down by more than $50 million, company financials show. Closings soon followed.
“Retail trends continue to shift nationally, and those shifts are often felt locally. The closing of the Steak ‘n Shake is one example of that,” said Stewart Meek of Centennial’s Economic Development Department. “We do not yet know what the future holds for the site. Churn in the retail market is common with closures often followed by new tenants that benefit the local community.”
Meek said the city hasn’t been informed if the restaurant is closed permanently.
Simons said he understood how things could go bad for the company, but that didn’t mitigate his intermittent craving for one of its classic milkshakes.
“I’m gonna miss those,” he said as he drove away.
Citations
U.S. Securities & Exchange Commission filings. www.sec.gov
0 Comments:
Post a Comment