Joe’s Crab Shack looks to expand after IPO
Joe’s Crab Shack is making investors drool with its plan to expand in the dense U.S. market, sending shares of parent company Ignite Restaurant Group Inc. (IRG) up 22 percent on its first day as a publicly traded company Friday.
Ignite, which has 122 Joe’s Crab Shack restaurants and 16 of its newer Brick House Tavern+Tap chain, says it still has plenty of room to add new restaurants in the U.S., an attractive proposition for investors looking for a growth stock. Most chain restaurants in the U.S. are forced to turn to international emerging markets for growth, as their operations in the U.S. are contracting because of the economic downturn and heavily saturated chain restaurant industry.
“I wanted to come to market with a growth company, not just a growth hypothesis,” Chief Executive Ray Blanchette told Dow Jones. The company plans to open 11 restaurants this year. “It was important to me that we spent the past few years growing restaurants, not just growing sales at existing restaurants,” he said.
Connecticut-based private equity firm J.H. Whitney Capital Partners LLC bought 120 Joe’s locations from Landry’s Restaurants in 2006 in a USD 192 million deal. It then launched Brick House — a gastropub-styled brand — in 2008 and changed its name from Joe’s Crab Shack Holdings Inc. to Ignite.