Littleton-based Champps Entertainment Inc. is considering closing as many as five of its 66 restaurants, with the most likely targets being underperforming eateries at shopping malls.
The company has yet to disclose which locations it is considering closing, or when.
The decisions will be affected by Champps’ ability to achieve lease concessions from landlords or find companies to sublet the space, according to a securities filing Tuesday.
Champps has written down asset values for three restaurants in the third quarter of 2005. The two additional closings could result in a $4.4 million noncash charge, the filing showed.
The possible closings will enable the company to “focus on stores that are operating profitably,” said Dave Womack, chief financial officer.
Champps also disclosed Tuesday it plans to repurchase up to $5 million in stock during the next two years.
The two announcements caused the company’s stock to surge by 10.4 percent, closing Tuesday at $7.39 a share.
The casual-dining chain operates 53 restaurants and has 13 others under franchise or licensing agreements, including three in Colorado – one each in Lone Tree, Littleton and Colorado Springs.
It employs 300 people throughout Colorado and 40 at its Littleton headquarters, Womack said.
The company operates in 23 states under the brands Champps Americana, Champps Restaurant and Champps Restaurant and Bar.
While the casual-dining industry is growing, niche players like Denver’s Chipotle Mexican Grill and Dave & Buster’s Inc. are expanding the fastest, said Arjun Sen, president of the Restaurant Marketing Group in Aurora.
Restaurant chains like Champps are being affected because the number of casual-dining choices has grown, Sen said.
“A brand like Champps is not a destination restaurant,” he said.
The company, formed in 1984 as Unique Casual Restaurants, changed its name to Champps Entertainment in 1999.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
