Restaurant Chain Grateful for Thank-You Cards

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The owners of Bennigan’s Steak and Ale, Bakers Square and Village Inn chains are all filing for liquidation or bankruptcy protection.

And many other casual restaurant chains are at best struggling amid the high gas prices and reduced consumer spending.

Yet, earlier this month, California Pizza Kitchen Inc., the Los Angeles-based purveyor of gourmet pizza, posted some impressive results with both its second quarter profits and revenue on the rise.

But even Co-Chief Executive Richard Rosenfield acknowledges that it isn’t the chain’s signature barbecue pizza necessarily behind the big numbers.

Part of the company’s second quarter success can be attributed to the re-launch of its 10-year-old Thank You card promotion. The program offers diners the chance to receive a variety of prizes, including 10 percent off their next bill, a first class domestic airline ticket or and here’s the biggie up to $25,000 in cash.

“We knew we were facing our most difficult sales comparisons of the year,” said Rosenfield. “We pulled out a program that we hadn’t used in 10 years.”

The promotion helped boost comparable store sales by 1.4 percent over the same period last year, as net income rose 4 percent to $6.6 million and revenue rose 11 percent to $177 million.

Investors have rewarded the chain, sending its stock up some 40 percent since the start of July. Shares closed at $14.95 on Aug. 14.

Part of that growth comes from the fact the chain has pursued expansion despite the soft economy. Eleven new stores opened this past year and another is planned domestically over the next two quarters.

The company is also planning to enter new international territory in the Middle East with the opening of a franchised full service restaurant in Dubai’s largest mall.

Moreover, in October, California Pizza Kitchen is planning to open a second L.A. Food Show restaurant, the upscale alternative to the chain’s traditional sit down eateries. The restaurant, which will be next to the new luxury Montage Hotel in Beverly Hills, offers diners an international-inspired menu, with dishes like grilled Thai chicken breast with ginger rice.

The expansion is surprising considering the troubles at places like Bennigan’s and Bakers Square. And Chicago landmark pizza chain owner Uno Restaurant Holdings Corp. and Cypress-based Real Mex Restaurants Inc., the largest full-service casual dining Mexican chain in the U.S., are feeling the squeeze of burdensome debt and are trying to negotiate with lenders to defer interest payments.

California Pizza Kitchen’s latest, second quarter balance sheet showed $62 million in current and short-term debt.

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