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Ruby Tuesday Slows, Upgrades

MARYVILLE, TN-The restaurant chain plans up to 50 new restaurants in 2007, down from 60 last year.

By Debra Hazel | Updated on January 11, 2007

MARYVILLE, TN-In an effort to attract more upscale consumers, Ruby Tuesday will slow growth in the next five years to 30 new stores annually, while converting up to 50 units from its bar-and-grill format to a dinner-house look this year, executives said at its second quarter conference call.

The company’s five-year plan calls for a slowdown in new restaurant development to focus on growing sales at existing restaurants and acquisitions. For fiscal 2007, the casual restaurant chain anticipates opening 45 to 50 company-owned restaurants, as well as 25 to 30 franchise openings for the year. The company opened 60 new company-owned stores in 2006.

“Our focus continues to be on free cash flow, and an even greater emphasis on cash flow,” said Sandy Beall, founder and chief executive officer. “Though we feel we have plenty of long-term restaurant growth, we feel it is most prudent, based on soft consumer demand and potential excess restaurant supply, that we slow new restaurant growth even further over the next several years.”

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