Suburban Dallas-headquartered Metromedia Restaurant Group, part of the larger Metromedia conglomerate owned by billionaire John Kluge, did not release an official number of restaurants to be shuttered. But The Wall Street Journal put the total at 200—50 of which were Steak & Ale locations.
Franchisee-owned Bennigan’s locations are to remain open, at least for the time being. The 138 locations still in business are losing the chain’s large-scale broadcast ad campaigns, however.
In June, it leaked that MRG was in default with major creditor GE Capital, which provides a large portion of funding to the restaurant sector. Sector analysts view the collapse of Bennigan’s and Steak & Ale as a positive for an overcrowded casual dining market, and say it could loosen the lending market somewhat.
John Glass, a marketing analyst for Morgan Stanley, told Nation’s Restaurant News, “With capacity reduced, we believe the remaining participants will see a greater rebound on sales.”