Shuttered Restaurants Tied to Joe’s Crab Shack’s Likely Return to Original Parent Company
St. Louis, MO/August 19, 2017 (STLRestaurant.News) — If you had plans to have lunch or dinner with friends or family at Joe’s Crab Shack in Fairview Heights or St. Peters, you’ll need to make other plans. If you’ve been saving that Joe’s Crab Shack gift card you found in your stocking last Christmas for a special occasion, then you’ve probably waited too long. The family seafood favorite at 51 Ludwig Drive in Fairview Heights, Illinois abruptly closed over the weekend. The Joe’s Crab Shack at 5856 Suemandy Drive in St. Peters was similarly shuttered. It’s unclear if employees were notified prior to the closing. Illinois staff members received their final paychecks Tuesday, according to a report in the Belleville News-Democrat.
An email sent to employees Monday and obtained by the BND blamed parent company Ignite Restaurant Group’s June bankruptcy filing and impending sale for the permanent closure of the St. Louis area restaurants. The company has closed more than 40 Joe’s Crab Shack locations across the country, including all three Illinois locations (Fairview Heights, Gurnee, and Schaumberg), and two in Missouri (St. Peters and Independence). According to the restaurant’s website, the only remaining Joe’s Crab Shack in Missouri is the Branson location at 717 Branson Landing. Otherwise, local Crab Shack fans will have to drive to Memphis, Nashville, or Louisville, KY for their favorite steampot.
The closures follow a June 6th announcement that a tentative deal was in place for the sale of Joe’s Crab Shack and a sister brand, Brick House Tavern + Tap, to the San Diego-based private equity firm Kelly Companies. The announcement also stated that “Pursuant to Section 363 of the Bankruptcy Code” Ignite would also file a motion to allow other companies to submit bids for its holdings through a Court-supervised process to purchase the assets being sold. The original parent company of Joe’s Crab Shack, Landry’s Inc. (Bubba Gump Shrimp Co., Morton’s The Steakhouse, McCormick & Schmick’s, etc.) won the bankruptcy auction last week to acquire Joe’s Crab Shack and Brick House Tavern + Tap for $57 million, according to the Wall Street Journal. A final hearing on the sale is scheduled for this week, but it is expected to be approved.
The restaurant shutdowns are counter to statements made by Ignite Restaurant Group in announcing its bankruptcy sale. That announcement had indicated there would be no closings as a result of the company’s Chapter 11 filings and impending sale. It read in part, “Both Joe’s Crab Shack and Brick House Tavern + Tap restaurants will remain open and operating as usual and Ignite customers can expect to continue to enjoy the same great food and service that they have come to expect from our brands.” Clearly the plans have changed since Landry’s won their bid.
In an interview after last week’s bidding win, Landry’s founder Tilman Fertitta told National Restaurant News that Landry’s plans call for shrinking the Joe’s Crab Shack concept “considerably” and to sell off the Brick House casual-dining brand. Fertitta had originally bought Joe’s Crab Shack in 1994, when it had one restaurant, and sold the brand to private-equity firm J.H Whitney & Co. in 2006, which went public in 2009, changing its name to Ignite Restaurant Group.
According to the website Consumerist.com, the company began closing restaurants without warning on August 7th, with some employees reporting that they showed up for work and were turned away. In April 2017, the Joe’s Crab Shack website had listed 112 locations nationwide. As of this writing, there are just 72—reflecting these recent closures. It is unclear what will become of the shuttered St. Louis area locations.