Lone Star Steakhouse closes three unprofitable Mid-Michigan locations

BANGOR TWP. — People looking to eat lunch at Bay County’s Lone Star Steakhouse on Monday were greeted with locked doors and signs announcing the restaurant’s closure.

The restaurant, 4107 E. Wilder, shut down Sunday, following a corporate decision to close 19 of its under-performing restaurants throughout the country.

The Lone Star restaurants at 2255 Tittabawassee Road in Saginaw Township and on Miller Road in Flint also were closed.

The closures leave just four Lone Star Steakhouse locations in the state in Battle Creek, Dundee, Jackson and Mount Pleasant.

“It’s a sad day and we hate doing it, because in a lot of cases, these locations are the original steakhouse in its marketplace,” said Howard Terry, vice president of marketing for Lone Star.

Terry said the decision to close the 19 locations was because of poor sales over the past three years. No other closings are planned, he said.

All of the 19 restaurants were unprofitable, despite efforts to turn things around, Terry said.

“We put a lot of money into all of these restaurants and they just weren’t responding,” he said.

Of the 131 Lone Star locations in the country, those three were among the lowest-performing from a sales perspective, Terry said.

The weak performances, he said, are site specific and not a regional issue.
Terry referred to the recently renovated Dundee location, which is one of the best-performing stores in Lone Star’s system, in both sales and profits.

Reasons behind the poor sales aren’t clear, Terry said, though changes in those areas since those restaurants opened likely played a role.

While the Wilder Road Lone Star struggled to turn a profit for several years, the nearby Lucky’s Steakhouse has done “very good and consistent sales” since opening last November, according to a store manager.

Mary Lagalo said from a price and portion perspective, she thought Lucky’s had the edge on Lone Star.

“I didn’t hear a lot of comparisons, but from what I understand, our prices and portions were a bit better. People also seemed to say we had more variety to offer,” Lagalo said.

The Lone Store closures open a possibility for a new restaurant to assume the vacant location.

That may not come quickly, though. The nearby building at 3893 State in Bangor Township that housed Ruby Tuesday’s remains unoccupied nearly two years after the restaurant closed.

The three Michigan Lone Star closings are further signs of how tough the state’s restaurant industry has been hit by the economic downturn, said the vice president of public affairs for the Michigan Restaurant Association.

Andy Deloney said despite a small upturn in sales, the industry remains “very tough” in the state.

“There’s never been a tougher time to operate a restaurant in Michigan,” Deloney said.

The Michigan Restaurant Association released data last week that showed state restaurant sales over the first six months this year are up 1.6 percent from the first six months of 2009.

Though encouraging, Deloney said the small increase can’t come close to making up what’s been lost during the last several years.

“Sales have been down so much that it’s created other challenges. When your sales are reduced, you have to put off renovations and expansion of growth,” he said.