Restaurants

Ruby Tuesday names new CEO in bid to turnaround struggling restaurants

Key Points
  • Ruby Tuesday names Ray Blanchette as CEO, effective immediately.
  • The restaurant company has struggled with slowing sales and traffic that has led to more than 100 store closures in the last year.
  • Ruby Tuesday was acquired by NRD Capital late last year and is now privately held.
Ruby Tuesdays in Times Square, New York. A "Couple's VIP Table" at Ruby Tuesday on New Years Eve will cost $1,799.
Sunny Ripert | Flickr Commons

If you ask the executive team at Ruby Tuesday, they won't be shy about telling you the company is in trouble. That's why they are bringing in Ray Blanchette.

Blanchette will take the mantle of CEO immediately, the company said Tuesday, with the aim of turning around the struggling brand. The restaurant has shuttered more than 100 restaurants since August. As of Dec. 1, it operates just under 600 locations.

"Clearly, it's a turnaround," Blanchette told CNBC at the ICR Conference in Orlando, Florida. "We're not being shy about calling it that."

Blanchette will replace interim CEO Aziz Hashim, managing partner of NRD Capital. Hashim took the reins from former CEO Jim Hyatt in December after Ruby Tuesday was taken private in a $335 million deal. Hyatt had been at the company since April.

In Blanchette's more than 25 years in the industry, this isn't the first time his has been called upon to revive a company. Before becoming CEO of Au Bon Pain, which was recently acquired by JAB Holding's Panera, he revitalized Joe's Crab Shack as CEO of Ignite Restaurant Group.

"I feel like I grew up in bar and grill," said Blanchette, who worked with TGI Friday's for 18 years. "This is kind of a homecoming for me. I'm excited to now lead a brand that I've competed with for decades."

Blanchette told CNBC that to start he plans to re-evaluate what makes the brand unique. Casual dining chains have become pretty ubiquitous with generic menus and interiors. Blanchette wants to change that.

He said he will work with the brand's research and development team to innovate its menu but still stay true to the brand. However, unlike many of his competitors, Blanchette doesn't plan on shrinking the menu just for the sake of simplification.

"The risk you run when you get really aggressive shrinking the menu is alienating core users, and so our approach is going to be more balanced," Blanchette said.

He will also steer away from investing too much into technology and third-party delivery. He said Ruby Tuesday needs to focus on what's "inside the four walls" of the restaurant before expanding its out-of-restaurant experience.

"Technology clearly plays a role, but I'm not sure if the technology that can help us exists," Blanchette said.

He said he has yet to see any major return on investment that leads him to believe the company should be putting its effort behind delivery right now.

Ruby Tuesday has to remind lapsed customers why they liked the brand, NRD COO Susan Beth told CNBC.

"We have got to get them to love us again," she said.

Beth said that's "doable" under Blanchette.