The McLean-based food company Vie De France Corp. last June sold its interest in the Tysons Corner branch of the California Pizza Kitchen chain. An article in Thursday's Business section incorrectly stated the ownership status. (Published 12/8/90)
Vie de France Corp., the McLean-based food and restaurant business, announced yesterday that it plans to close or sell one-third of its company-owned restaurants to cut deepening losses.
Twelve of 61 Vie de France restaurants nationwide will be closed permanently and five restaurants will be sold or franchised. None of the 18 Washington area restaurants is expected to be affected, Vie de France President Richard M. Tolbert said.
"We are not getting out of the restaurant business," Tolbert said. "But we are concentrating on improving management control over company-owned restaurants ... and cutting underperforming units or franchising them."
The company will take a $4.5 million charge against earnings in the second quarter to reflect the new actions, Tolbert said.
Well-known for its croissants and baked goods, the company has been struggling to find a recipe for success for its three divisions -- restaurants, commercial baking and the new sous vide food operation, which offers gourmet foods in vacuum-packed pouches for hotels and other food-service businesses.
Vie de France lost $3.1 million on sales of $102 million in the fiscal year ended June 30, blaming the restaurant division and the start-up costs of its sous vide operation. This year's loss followed a loss last year after years of strong earnings during the mid-1980s.
The operation of the company-owned restaurants in several metropolitan areas, including Los Angeles, St. Louis and Dallas, has proved expensive and difficult to manage for Vie de France. Earlier this year, the company froze expansion of those operations, seeking franchisees to buy company-owned restaurants outside its core markets of Washington and Chicago. Tolbert said the franchise strategy -- there are only three franchises -- was key for the future of the restaurant division.
A series of management changes has also hurt Vie de France and earlier this year the company underwent a management reorganization, one of many over the past few years.
Tolbert said the multimillion-dollar capital expenditures in its bakery and sous vide divisions should soon improve earnings.
He said, however, that further reductions in expenses, including layoffs, will be needed to improve financial results. He said Washington area operations will only be minimally affected.
Vie de France officials are hopeful for the expansion of the California Pizza Kitchen, a restaurant selling pizzas with unusual toppings. Vie de France is the East Coast partner of the chain's Los Angeles-based creators and opened the area's first location last year at Tysons Corner Center. The restaurant there has been successful.