Article Excerpt:
TWST: What is Ruth's Chris Steak House, Inc.?Mr. Miller: We are the leading fine dining restaurant chain in the world. We specialize in US prime beef, and have 93 restaurants operating in the domestic US, Canada, Taiwan, Hong Kong, Mexico and Puerto Rico. We have a concept that has been around for almost 41 years. The business was started by a great woman, Ruth Fertel. She started the business in 1965 in New Orleans, Louisiana. She was a single mom who went out and mortgaged her home to buy a restaurant called Chris's Steak House. A few years later, there was a fire at the original Chris's Steak House and she was required to relocate that restaurant up the street, and she lost the rights to use the Chris's Steak House name. So she added her name to the front of it, and that is where we got the tongue-twisting name of Ruth's Chris Steak House. Over the history of our business, it has become known worldwide as a great fine dining steakhouse. Ruth owned the business herself for many years. She took on an investment partner, Madison Dearborn Partners, back in the late 1990s as she was starting to think about her retirement and her estate. Madison Dearborn was the equity sponsor for the company for several years until the company went public in August 2005. We operate both a company-owned and a franchise system. Ruth signed her first franchise agreement with a friend of hers, Tom Ryan, in 1976 in Baton Rouge, Louisiana, and that was a unique aspect of our business. There is no other fine dining restaurant chain that I am aware of that does both company-operated restaurants and franchised restaurants. That business model is the one that we continue today. The company is traded on the NASDAQ under the symbol RUTH. We became public in August, and, since that time, the company has embarked on a rather aggressive expansion program to further build out our chain. We have expectations of opening somewhere between 10 and 14 new restaurants in 2006. We just finished a great year in 2005. We've had double-digit same-store sales from our company-owned restaurants for two years now. The average restaurant is approximately 8,500 square feet, and we're primarily dinner-only. The restaurants achieved sales of north of $5 million per restaurant. We have a specialized way that we prepare our steaks in an oven that Ruth helped design that reaches temperatures of close to 1,800 degrees. We also are known as the home of sizzling steaks because we serve them on very hot 500-degree plates, so the steak stays hot from the first bite to the last bite. We complement our steaks with great side items that are served family style, which is a tradition at Ruth's Chris, and we also complement our food and great wines with a southern style hospitality of service that we inherited from Ruth. There are several points of differentiation between the Ruth's Chris concept and some other chains and independent steakhouses. One of the ones that are most noteworthy is that we have a very strong appeal to females. We have a broad segment of that population that enjoys dining with us. We estimate approximately 40% of our consumers are female. We do an enormous amount of business with families as well, particularly families that are looking for a great restaurant for a special occasion dining experience. We also have great patronage coming from business travelers, affluent baby boomers and affluent consumers. One of the reasons that we believe our business has been so strong over the last few years is the strength of the economy, and the continued growth and expansion of the population of wealthy Americans who are looking for a special dining experience and have the financial resources to visit a restaurant like ours very frequently. About 25% of our sales dollars come from the service of adult beverages, which are dominated by great wines. Wine has been a growing beverage for us, and has been growing in popularity in the US over the last several decades. Approximately 18% of our sales revenue comes from the service of wine.
Tickers included in this excerpt: RUTH
TWST Newsletter
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.