The message on Guzman y Gomez's U.S. website on Friday, May 22
After six years competing with other Mexican restaurants in the United States, Guzman y Gomez is throwing in the towel. The Australia-based fast casual chain announced May 22 that is is ceasing its U.S. operations "with immediate effect." The chain had operated eight locations in and around Chicago.
A press release from the company, which is publicly traded in Australia, said the U.S. locations were not meeting sales goals. Investors evidently were happy with the decision, as the stock jumped 20 percent after the announcement.
“I have always been confident in the differentiation of our food and guest experience, however this was not translating to an improvement in sales momentum," said Steven Marks, founder and co-CEO of the company in the press release. "Having spent the last 3 months in the US, I realized this was going to take significantly more time and capital than we had expected. In assessing the trajectory of the current network, the Board and I have concluded that the business is unlikely to deliver the performance that would justify continued investment of shareholder capital.”
The restaurant was founded in 2006 and has 242 locations in Australia. The company plans to refocus efforts in growing in Australia now that it has left the United States. It also has locations in Singapore and Japan and does not plan to exit those markets.
"“We are very proud of our international partners in Singapore and Japan and see substantial growth ahead in each market. Beyond Singapore and Japan, we continue to believe there will be the right opportunities, in the right markets, with the right models. When those opportunities arrive, we will be ready. Today's decision is about the US specifically, it is not a statement about GYG's global potential," Marks said in the release.
The release did not specify what is happening with the U.S. staff of the eight closed restaurants, but it did say, "the Board wishes to recognise our people in the US. From day one, the US team has worked with passion, professionalism and conviction to bring GYG to a new market. Their efforts have delivered genuine progress in brand building, guest experience and operational standards, and the quality of food and culture they have established is something that GYG is proud of. The business is committed to supporting every member of the US team through this transition with the respect and integrity they deserve."