Lots of activity this morning in the restaurant industry. Landy's Restaurants - which operates a number of chains including the Chart House and Rainforest Cafes - has made an offer to purchase the Smith & Wollensky Restaurant Group, an upscale steakhouse with restaurants in cities such as New York, Las Vegas and New Orleans. It's just my opinion, but it doesn't get much better than Smith & Wollensky's when you want a great steak dinner.
And, McDonald's is apparently ready to sell off another one of its operations. Last January it successfully spun off the Chipotle Mexican Grill restaurants in an IPO that was priced at $22 a share. Today, the stock is trading at $58.75. This time McDonald's is pondering the future of Boston Market. It bought the chain out of bankruptcy in 2000 for a mere $173 million. Back then it was known as Boston Chicken and was the first real effort to create a healthy fast food service. But the company tried to expand too fast and wound up in bankruptcy. At its peak, there were more than 1,200 Boston Market restaurants, today there are about half. McDonald's will probably recover their investment many times over if they spin off Boston Market.
Arthur Laffer, the father of the Laffer Curve and the economic advisor to several presidents, including Ronald Reagan, has predicted that the price of crude oil could drop to $35 a barrel in the near future. It's all about supply and demand, says Laffer, who until last year was headquartered here in San Diego. However, his concerns about the real estate market and his desire to be near his son and grandchildren, led him to move to Nashville. His oil price forecast is looking better and better. Crude is trading this morning just above $52 a barrel, the lowest level since May of 2005. OPEC members are evidently planning a meeting to discuss more production cuts. That's unlikely, especially if oil falls to $35. Members will be bring the stuff out of the ground as fast as they can.
Executives at Citigroup, the largest financial services company in the world, have spent the past 14 months to develop a new branding program for the company. So, after spending millions of dollars on research and study groups, they have come up with a new name - Citi. Of course, this is already a logo they use on a lot of their office buildings and credit cards. Of course, the company used to be known as Citicorp for decades. But, after the merger with the Travelers Group in 1998, the name was changed to Citigroup. An official announcement is expected soon.