Applebee's Blames Failed Millennial Campaign For Restaurant Closings, Losing 'Traditionalist' Customers

DineEquity (NYSE:DIN), the parent company of Applebee’s and IHOP announced it would be closing up to 160 restaurants Thursday in a bid to shore up profits. It will also bring in a new chief. One of the reasons the company feels that its profits are down was a failed attempt to win over millennial diners.

“Over the past few years, the brand’s set out to reinvent Applebee’s as a modern bar and grill in overt pursuit of a more youthful and affluent demographic,” said John Cywinski, president of Applebee’s in a call with analysts this week. “(It was) a clear pendulum swing toward millennials.”

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DineEquity felt that by pushing so hard for a new millennial demographic, it alienated its “Middle America” core demographic.

“I think, in retrospect, we may have tried too hard to attract new guests. That left some of our fans shaking their heads, asking ‘What happened to Applebee’s?’” Patrick Lenow, a spokesman for DineEquity told the Washington Post Friday.

Applebee’s plans on returning its attention to “value-seekers” and “traditionalists.” The company wants to bring some older popular menu items and dump new ones such as a turkey sandwich with sriracha chile lime sauce, according to the Washington Post. Applebee’s wants to bring back all-you-can-eat specials and will focus on discounts like the “2 for $20” special.

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In the second quarter this year, DineEquity pulled in $20.9 million, down from $26.4 million in the same quarter last year. Stephen P. Joyce will lead the company starting in September. Joyce previously was the CEO of Choice Hotels.

DineEquity aims to close around 135 Applebee’s locations and around 25 IHOP locations out of its 3,700 franchises. DineEquity hopes to close underperforming locations that possibly damage the brand and older locations. According to Grub Street Thursday, the company also seeks to open 20 to 30 new Applebee’s, mostly overseas, and 80 to 95 IHOP locations in the U.S. The new locations might help off set job losses from the closing. The company overall employs 28,000 people.