Guzman y Gomez pulls the plug on US expansion, shutters stores
Guzman y Gomez closed its Chicago stores and abruptly pulled the plug on its ambitions to conquer the American market, after years of spending tens of millions of dollars and defending it as a long-term investment.
Despite efforts to reverse the chain’s expansion into the United States, the Australian-born Mexican burrito seller has failed to hit enough sales targets to justify the investment, burrito chain founder Steve Marks said.
“After spending the last three months in the US I realized this was going to take much more time and capital than we expected,” Marks told the ASX.
“In assessing the trajectory of the existing network, the board and I have concluded that the business is unlikely to deliver the performance that would justify continued shareholder capital investment.”
Guzman y Gomez said they expect to record a hit to their financial statements of up to US$40 million ($56 million) as a result of the exit.
More to come.
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Jessica Yun is a business reporter covering retail and food for The Sydney Morning Herald and The Age.Connect with: X or email.
