Reports: Shake Shack Considers IPO
Nation’s Restaurant News reports that Shake Shack, the fast-growing chain of high-end burger restaurants, is seriously considering a public offering. The chain, owned by New York restaurateur Danny Meyer’s Union Square Hospitality Group, is credited with pioneering the super high-end burger concept, and it has developed something of a fanatical following since it first opened, as a literal shack, a decade ago in Manhattan’s now-trendy Madison Square Park.
While Shake Shack may strike some market watchers as being a bit small for an IPO – NRN.com quotes a Reuters report as suggesting that the restaurant chain expects to report around $20 million in earnings next year, the company’s strong market adoption and rapid expansion may prove appealing to investors seeking to back an emerging food brand. And the chains’ expansion overseas – of its 53 restaurants, 21 are already established in Europe and the Middle East – would provide a pretty good case for a growth-oriented use of proceeds. And El Pollo Loco’s recent successful IPO is also no doubt inspiring Shake Shack’s investors to consider the public markets option.
Shake Shack’s success comes at an unusual time for its founder, Danny Meyer. One of New York City’s most celebrated restaurateurs, Meyer recently announced his intention to close his iconic downtown restaurant, Union Square Café, due to rising real estate and real-estate related costs. But perhaps the two phenomenon are in some way linked. Chew On That has earlier reported on the growing popularity of higher-end “fast casual” dining chains that offer casual accessibility while emphasizing quality food ingredients. It may just be that concepts like Shake Shack, playing at the high-end of the fast casual market place, may just be much more scalable and in-tune with the economics of present-day consumer dining, at least as compared to the uber-high end neighborhood restaurants like Union Square Café.
Of course, if that is true, genuine foodies may be much the worse for it. To be clear, certain members of editorial staff at Chew On That are hardly above enjoying an occasional fun, calorie-filled bite at places like Shake Shack – the “Mothership” of whose chain is less than a five minute walk from our own New York City headquarters. However, exchanging Union Square Cafe’s pan-roasted rainbow trout with hon-shimeji mushrooms, sunchokes and freshly picked pea shoots for a double ShackBurger® topped with lettuce, tomato and ShackSauce® seems not just a bad trade, but an almost unconceivable one …
For further reading:
Exclusive: Burger Chain Shake Shack Preparing for an IPO – Sources, www.Reuters.com
There Goes the Neighborhood Cafe, NYTimes.com
Photo credits: Wikimedia Commons
Tags: burger, burgers, cheeseburgers, Danny Meyer, dining, fast casual, fast food, finance, hamburger, hamburgers, IPO, Madison Square Park, new york, public markets, restaurant, restaurant chain, Shake Shack, union square cafe