Applebee's International, Inc. (NYSE: APPB) February decision to put itself up for sale could be seen as the company's admission that it's no longer a company that has any growth potential. Its future may be brightest in the hands of a private owner who can cut costs and ring out efficiency away from the glare of Wall Street's demands for growth -- that is if one can be found.
According to today's Wall Street Journal, (subscription required) even the woman who founded the company, T.J. Palmer, doesn't like it: After having visited the restaurant chain regularly for years, Ms. Palmer says, she rarely goes anymore. "It doesn't have anything that would make me want to come back."
What went wrong? Competitors copied Applebee's and the company failed to evolve, leaving the company with a stock price that has been stagnant for 3 and a half years. The company is trying to reinvent itself by attracting more upscale consumers, and has even hired The Food Network's Tyler Florence to revamp the menu.
But second acts in the business world are rare, and Applebee's reputation is working against it. My college-age friends refer to the chain as Crapplebee's, and the company doesn't really seem to be part of the modern restaurant landscape in any meaningful way.
Given the fact that the Applebee's brand appears to be losing value as hipper chains cramp its style, I'm going to make a bold prediction: The company's search for a buyer will be unsuccessful, and shareholders will continue to reap returns that are about as boring as the food on the menu at Applebee's.