DineEquity CEO Julia Stewart, one of longest serving chief executives in the casual restaurant industry, has quit the company amid sharp, ongoing declines at its Applebee's chain.
Stewart, who as CEO of IHOP in 2007 engineered the takeover of Applebee's in a $2.1 billion deal, will be replaced on an interim basis by Richard Dahl, the lead director on Dinequity's board, the company said on Friday. She took the reins of IHOP in 2002.
Though Stewart is well regarded for reinventing IHOP and overseeing a re-franchising of DineEquity's restaurants, her departure comes as efforts to update Applebee's seem to be failing so far: Applebee’s same-store sales were down 7.2% in the fourth quarter, a worsening trend for a year that saw them fall 5%. (At IHOP, the fell 2.1% in the quarter)
Last year, Applebee's franchisees removed the traditional gas grills that have become an industry standard and replaced them with new wood-fired grills at all 2,000 U.S. locations. The chain also tried hand-cut steaks and later tried discounting in a bid to win over consumers, who balked at the efforts. And the company suggested the brand's problems could be long lasting.
"While a turnaround of Applebee's will not happen immediately, the results of a comprehensive diagnostic conducted by a world class management consulting firm has enhanced our understanding of what has driven our recent sales trends," Dahl said in a statement. To be fair, the casual dining industry has been struggling as consumers look to save money and are eating at home more often.
Once a permanent new CEO is found, DineEquity will separate the chairman and CEO roles.