Collins Foods to close remaining Sizzler restaurants in Australia

The Sizzler brand will disappear from Australia after 35 years, with Collins Foods to close the chain’s last nine restaurants.

One of the last Sizzlers to close, at Mermaid Beach in Queensland.

Sizzler, a family favourite where for 35 years diners have tucked into steak, salad, seafood and cheese toast, will close all its remaining restaurants in Australia by mid-November.

The chain, another corporate victim of the coronavirus — which had been particularly devastating for the restaurant industry — will see as many as 600 staff made redundant.

Collins Foods, the ASX-listed food group that also owns a stable of KFC restaurants in Australia, said the nation’s nine remaining Sizzler restaurants will shut for good by November 15.

Sizzler first came to Australia in 1985 and although initially popular it later retreated to a base around Queensland where its food style was more appreciated than in southern states.

But the COVID-19 pandemic has now dealt a death blow to the chain, especially with its smorgasbord-style offering frowned upon in the pandemic.

Collins Foods said the financial performance of its Sizzler had been under constant review since 2015, when, following a brand review, it declared the chain were no longer considered to be core to the company’s strategic growth.

“Since then and until this year, trading continued in stores with forward lease obligations and cashflow positive earnings, while 19 Sizzler restaurants have been closed along the way,” the company said.

However, it said of the three restaurant brands that Collins Foods operates, Sizzler has been hardest hit by the COVID-19 pandemic.

“As a casual dining concept, and unlike Collins Foods’ KFC and Taco Bell restaurants, Sizzler revenues and earnings have been slow to recover from peak COVID-19 impacts, and the overall Sizzler business has continued to operate at a loss since the onset of the crisis.”

The Sizzler restaurants closing are located in Queensland at Mermaid Beach, Loganholme, Toowoomba, Maroochydore and Caboolture; in Western Australia in Innaloo, Kelmscott and Morley; and in New South Wales in Campbelltown. These restaurants are all company-owned leasehold sites.

Sizzler’s approximately 600 dedicated employees have been offered redundancy packages, although Collins Foods is looking to redeploy as many as it can to its KFC and Taco Bell networks.

“Collins Foods will continue to licence the Sizzler brand in Asia as it has done for the past 29 years, and there is no change envisioned to those operations,” it added.

An earlier Sizzler under demolition.

Commenting on the closures, chief executive Drew O’Malley said: “This has been a difficult decision for Collins Foods, especially given the impact it will have on our dedicated Sizzler employees and customers in Australia.

“As a casual dining concept, Sizzler has been the brand in our portfolio most impacted by the COVID-19 pandemic. The ongoing impact of COVID-19 on revenues has meant that unfortunately, these restaurants have not established a clear path to profitability in the foreseeable future.”

In fiscal 2020 Sizzler Australia revenues accounted for less than 3 per cent of Collins Foods’ total revenue.

“While the Sizzler Australia closure will allow us to minimise current-year and future losses, there will be some one-off closure costs that will be reflected in the upcoming half-year results,” Mr O’Malley said.

“Closing restaurants is not something we do often and not a decision we take lightly, especially for a brand as beloved as Sizzler which has been such an important part of the Collins Foods’ history.”

Sizzler was founded in 1958 as Del’sSizzler Family Steak House by Del and Helen Johnson in Culver City, California. It has around 270 stores.