Bob Evans to Lay Off 1,100 Workers

Bob Evans Farms Inc. said it would close 27 underperforming restaurants in a move to increase profitability. According to the company, 1,100 restaurant workers will be laid off.

"Performance at each of these locations...was not meeting expectations," said Chief Executive Officer Saed Mohseni.

Bob Evens will offer employment in nearby restaurants to the impacted workers. Severance benefits will be offered to full-time and part-time employees who cannot be relocated.

The company will take a charge of $7.5 million to $8.0 million during the fourth quarter related to the closures, with most coming as a noncash impairment charge and the remainder related to severance and other closing costs. Bob Evans already has closed 21 company-owned restaurants including five in Missouri and three in Indiana. It expects to close six-leased locations.

The impacted locations generated last 12-month sales of about $30 million. The company expects to make $20 million from the sale of the company-owned restaurants and expects the closures to increase pretax profit by about $1 million.

Activist shareholder Thomas Sandell, who won a third of the company's 12 board seats in an August 2014 proxy fight, has been in a public beef with the board he helped install at the restaurant and packaged food company. Mr. Sandell wants the company to separate its packaged-foods unit from its restaurant-chain business.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

April 25, 2016 10:15 ET (14:15 GMT)

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