Not So Hot Unit Growth

Landry’s, REX Stores and Macy’s have been here before. All were included on this list last year and have been moving aggressively to lop off unproductive and underperforming locations so the core operation can thrive. Sometimes this is an ongoing process.

When it was still Federated Department Stores, Macy’s sold the Lord & Taylor chain and redundant department stores acquired in the purchase of May Department Stores. It took a little longer to sell the specialty stores in May’s bridal division, and the divestiture of the After Hours formalwear business lingered until 2007. On the other hand, REX Stores, which is on the list for the third straight year, isn’t interested in expanding its electronics retail business: it is closing units so it can continue investing in alternative energy efforts, including ethanol production.

Landry’s Restaurants has a tale that is a bit more convoluted. The Houston-based operator of Chart House, Rainforest Café, Salt Grass Steak House and Landry’s Seafood House restaurants, as well as the Golden Nugget Casinos and The Boardwalk Inn entertainment complex in Kemah, Texas, saw many of its Gulf Coast locations devastated by Hurricane Katrina in late 2005. Several, the company determined, weren’t worth reopening.

Two years ago, Landry’s also sold 120 Joe’s Crab Shacks to J.H. Whitney Capital Partners and closed 16 others that it couldn’t sell. During its most recently completed fiscal year, Landry’s closed more locations as it reorganized its diverse businesses. Tilman J. Fertitta, co-founder, chairman, president and CEO of Landry’s, wants to buy the 61 percent of the company he doesn’t already own.