Getting smaller is not at all times a nasty factor.
Even actually profitable manufacturers want to shut shops in some conditions on account of inhabitants shifts, lease will increase, or different working modifications.
That is one thing Amazon’s account agency, Archamedia Accountants, pressured to IFAMagazine.
“It is very important recognise that regardless of the various retailer closures in current instances, retail just isn’t dying, however evolving. Due to this fact, it’s important that companies continuously adapt and react to the market. Retailer closures themselves don’t at all times have to sign a ‘downfall’ or an ‘finish;’ generally they will signify a key step towards monetary restoration and a shift in deal with areas akin to e-commerce.”
Penn State Smeal School of Enterprise Assistant Professor Hari Sridhar and his colleagues from the College of Texas and Michigan State College discovered that selective closures is usually a optimistic.
“Researchers discover that chain retailers with a excessive market share have a tendency to achieve agency worth when shops are closed however that worth suffers when new shops are opened. Retailer closings improve agency worth by closing much less worthwhile retailer places, however new retailer openings could elevate considerations about profitability,” their analysis confirmed.
One struggling fast-food chain has been closing places, however it’s doing so in an effort to make the remainder of the corporate wholesome.
Noodles & Firm CEO Joseph D. Christina defined why the chain has been closing shops.
“Turning to earnings and margin development, we proceed to make disciplined selections that strengthen our enterprise and place us for sustained profitability. Some of the important levers we will pull is the strategic closure of underperforming eating places,” he shared in the course of the chain’s third-quarter earnings name.
He made it clear that closing a retailer just isn’t a simple determination.
“We’re approaching these closures thoughtfully, specializing in places the place we will successfully switch gross sales to close by eating places given a excessive mixture of off-premise income,” he added.
Closing eating places, the CEO made clear, will not end in shedding 100% of the gross sales these places generated.
“From the eating places we plan to shut, we count on to retain roughly 30% of gross sales by means of switch to neighboring items, according to the efficiency of current closed places. These actions enhance total gross sales leverage and improve restaurant-level profitability and effectivity,” he stated.
Extra Eating places
These shutdowns will put the corporate in a greater place.
“These closures are by no means straightforward, however they’re the suitable ones for the long-term well being of the model. By tightening our portfolio and specializing in high-performing eating places and markets, we will strengthen operations, elevate the visitor expertise, and deal with innovation that drives continued development in gross sales and margin,” he added.
Noodles plans to close as much as 49 company-owned eating places by the top of 2026.
Supply: Restaurant Enterprise On-line
For 2025 particularly, the corporate expects to shut 28-32 company-owned places and 4 franchised eating places.
Supply: Nation’s Restaurant Information
As of its Q2 2025 report, six company-owned and two franchise eating places had been closed in simply that quarter.
Supply: Noodles & Firm investor relations
In 2024, Noodles closed 13 company-owned eating places and 7 franchise places; 10 new firm‑owned eating places opened.
Supply: Noodle & Firm investor relations
Regardless of the closures, Noodles can also be opening new eating places: For instance, two company-owned items are anticipated in 2025.
Supply: Nation’s Restaurant Information
Complete income decreased 0.5% to $122.1 million from $122.8 million within the third quarter of 2024.
Comparable restaurant gross sales elevated 4.0% system-wide, comprised of a 4.0% improve at company-owned eating places and a 4.3% improve at franchise eating places.
Internet loss was $9.2 million, or $0.20 loss per diluted share, in comparison with a internet lack of $6.8 million, or $0.15 loss per diluted share, within the third quarter of 2024.
Internet loss within the third quarter of 2025 included $5.3 million of pre-tax restaurant impairments, primarily associated to the deliberate closures of underperforming eating places. Internet loss within the third quarter of 2024 included $0.2 million of pre-tax restaurant impairments.
Working margin was 5.2% in comparison with 3.9% within the third quarter of 2024.
Supply: Noodles & Firm investor relations
Jefferies analysts took a optimistic view of the shop closures.
“The agency additionally seen Noodles & Co.’s determination to shut extra underperforming shops in 2025-2026 as prudent, acknowledging that whereas the corporate’s turnaround will take time, the chance/reward profile stays positively skewed,” Investing.com reported.
This story was initially reported by TheStreet on Nov 16, 2025, the place it first appeared within the Restaurant part. Add TheStreet as a Most popular Supply by clicking right here.
