JCP Investment Management is pressuring Cheesecake Factory (CAKE, Financials) to split three of its smaller restaurant brands into a new public business, the Wall Street Journal reported, citing anonymous sources. The investment company owns around 2% of the equity of the restaurant operator.
JCP focuses on the restaurant industry, and it believes North Italia, Flower Child, and Culinary Dropout would experience greater expansion as an independent company, according to the report. The Wall Street Journal further reports that the corporation has volunteered to donate funds to help this potential business.
With a market value of around $2.2 billion, Cheesecake Factory, based in Calabasas, California, has more than 300 outlets in the United States and Canada. The investment group reportedly advised Cheesecake Factory to analyze its lesser businesses to investigate possible buyer interest strategically.
Cheesecake Factory confirmed it knows of JCP's investment. According to The Wall Street Journal, a spokesman said the corporation routinely interacts with shareholders and considers their opinions.
Cheesecake Factory opened for business in 1993 and saw years of consistent expansion. Still, same-store sales started to drop in 2017, The Wall Street Journal said. The Wall Street Journal reports that while the firm improved its profitability during the COVID-19 epidemic by concentrating on takeaway and delivery, it has since underperformed compared to rivals such as Texas Roadhouse (TXRH, Financials) and Darden Restaurants (DRI, Financials).
