Worldwide Restaurant Concepts Inc. shareholders have decided that steak and seafood are better on the barbie.
The long-suffering Sherman Oaks-based operator of Sizzler restaurants was bought last week by Sydney, Australia-based private equity firm Pacific Equity Partners.
Pacific Equity paid $6.92 per share for Worldwide. Last Wednesday, the company's shares hit $6.85, up 115 percent from $3.18 on the same day last year.
About 70 percent of Worldwide's 8,100 employees work in Australia, where Worldwide has 28 Sizzlers and 112 KFC restaurants under a franchise agreement with Yum! Brands Inc.
Listed on the New York Stock Exchange, Worldwide has been a public company for over 30 years, but has struggled, while competitors like Outback Steakhouse Inc. have flourished. The company lost $21.3 million last year on revenues of $324.8 million the kind of returns that prompted Worldwide to hire Santa Monica investment bank Houlihan Lokey Howard & Zukin to investigate strategic alternatives.
"To maximize the return to the shareholders, it certainly made more sense to sell," said Kenneth Cole, Worldwide's chief executive.
Cole also cited the expense of Sarbanes-Oxley compliance, which he estimated at $1.5 million annually. "There are a lot of restaurant companies that are doing that now because it is just so costly to remain public," he said.
Cole and other top executives are staying put locally, though the U.S. headquarters are moving to Culver City from Sherman Oaks. The executives will get a stake in the private company, but Cole declined to specify value.
Meanwhile, Worldwide is making a big push to increase the number of Sizzler franchises to 400 from under 200. In California, where two-thirds of Sizzler restaurants are located, Cole believes that 60 more restaurants are possible but the company also has wider expansion plans.
"There are so many opportunities in the United States that we are not in today," he said.
This Christmas Ernst & Young LLP projects that Angelenos will buy presents at the same rate as the rest of the nation.
Retail sales in L.A. and nationwide for the November-December period will jump 6 percent to 7 percent over last year, according to Ernst & Young's preliminary 2005 holiday forecast. Last holiday season, U.S. sales increased 8.3 percent.
In L.A., low unemployment rates and high personal income figures were offset by building permits that counted below the national average, said Aubie Goldenberg, a partner in Ernst & Young's retail and consumer products group.
"We are not overly optimistic at this point (about Los Angeles), and that is why the numbers reflect a smaller increase than last year," he said.
However, the forecast projects that premium jeans will continue to be strong sellers this holiday season good news for apparel manufacturers. Jewelry also is expected to be popular. Goldenberg said he would be studying the impact of high gas prices on manufacturers and retailers. Ernst & Young refines its holiday sales forecast in November.
Markwins International Corp., the cosmetics company behind the mass-market makeup brand Wet 'n' Wild, is going upscale with a licensing deal to make and distribute Calvin Klein beauty products.
The deal comes after a lengthy search by Markwins to find an available department store makeup brand to license. The City of Industry-based company had bid to license the French brand Lanvin, but lost out to New York-based Inter Parfums Inc.
"We were looking, and Calvin Klein was looking for someone to do their make-up. They were probably one of the few fashion houses that didn't have makeup in their portfolio," said Jeffrey Ten, Markwins' president and general manager of CK Calvin Klein Beauty, the name for the Calvin Klein cosmetics label.
Ten called the licensing agreement "long-term," but wouldn't disclose the exact terms of the deal. Markwins plans to produce Calvin Klein cosmetics in the U.S. and is working to contract with a manufacturing plant.
The Calvin Klein products are expected to hit the market in spring 2007 and will retail from $20 to $25 in 150 U.S. locations and an estimated 100 stores in Europe and Asia. Markwins' Wet 'n' Wild products retail starting at 99 cents at drugstore chains such as Walgreen Co.
With the Calvin Klein licensing deal, Markwins is further reaching beyond its traditional business of cosmetics combination sets or small kits with several makeup products. That strategy shift led to the licensing deal with Calvin Klein, as well as the recent acquisitions of AM Cosmetics, which owned the makeup brands Wet 'n' Wild, Black Radiance and Tropez, and Soho Cosmetics, a Montreal-based cosmetics manufacturer.
This and That
Los Angeles-based teen apparel company Rampage Clothing Co. was bought by licensing and brand-management company Iconix Brand Group Inc., formerly Candies Inc. New York-based Iconix paid $45.9 million in cash and stock for Rampage The California State Board of Equalization has announced that New Orleans evacuees with American Red Cross and Federal Emergency Management Agency assistance cards wouldn't be subject to state sales and use taxes.
*Staff reporter Rachel Brown can be reached by phone at (323) 549-5225, ext. 224, or by e-mail at email@example.com .
For reprint and licensing requests for this article, CLICK HERE.