Tuesday, November 18, 2008

Famous Dave's Announces Closure of Atlanta Market and Lease Terminations

(BUSINESS WIRE)--Famous Dave's of America, Inc. (NASDAQ: DAVE) today announced it has closed its three restaurants in Atlanta, Georgia as a result of current and expected continuing cash losses from those units. The company continues to have discussions with the landlords of these restaurants regarding a buyout of these leases.

The company also announced that it has terminated two leases for restaurants expected to open in 2009, in Hoffman Estates, Illinois and Hyattsville, Maryland. Famous Dave’s could recognize up to $2.5 million in charges in its fiscal 2008 fourth quarter related to the Atlanta closings and lease terminations.

“We made the decision to take these actions in order to preserve cash and respond appropriately to the current slowdown in market conditions,” said Christopher O’Donnell, president and CEO of Famous Dave’s of America. “With consumer confidence at an all-time low and retail spending dropping at significant rates, we need to ensure that our balance sheet and cash flow are strong and able to weather any continued softness in the economy.”

The company said it is reevaluating its future sites based on changing site demographic profiles and commercial real estate values, improving the unit level economics of its existing restaurant base and developing and refining a smaller, more cost-effective prototype. Operationally, the company is focusing on making sure that its organization is of an appropriate size to maximize its general and administrative resources and eliminate unnecessary expenditures.

“All of our priorities – from the size, structure and growth rate of our restaurant base to our day-to-day operations – remain unchanged from our recent conference call,” O’Donnell said. “We will continue to focus on product enhancement, and are working hard to enhance the ‘Famous’ experience our customers have long associated with our brand. This is a time to seek excellence and innovation in our operations with creative food offerings and a heightened level of customer service."

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