California Pizza Kitchen Inc. (CPKI), based in Los Angeles, recently announced that it has opened a 3,000 square feet restaurant, which accommodates a seating arrangement for 110 guests in Seoul, South Korea. This is California Pizza Kitchen’s fourth restaurant in South Korea, which the company opened with its franchise partner Handuck Development. The company opened its first restaurant in South Korea in November 2007.
The new restaurant is opened at Cheongyangri Station Mall, which has easy accessibility as it is connected by a major train station and also attract visitors and students from all the nearby locations and universities. The menu offers a plethora of variety and also has a special menu to tickle the taste buds of the children.
Taking advantage of the weak commercial real estate market, California Pizza Kitchen intends to open eight company-owned restaurants in fiscal 2010. The company currently owns and operates 262 restaurants, of which 206 are company-owned and 56 are either franchised or licensed in 32 states and 10 foreign countries.
We believe that with the opening of new restaurants in fiscal 2010, the leading casual dining restaurant chain is trying to gain market share, following a gradual improvement in the restaurant industry, which faced extreme challenges due to the economic turmoil that resulted in weak labor and tight credit markets, and a lower discretionary spending.
Most of the company’s peers such as BJ’s Restaurants Inc. (BJRI), Red Robin Gourmet Burgers Inc. (RRGB) and Buffalo Wild Wings Inc. (BWLD) have been on a modest expansion mode in fiscal 2010. We believe going forward this will intensify competition for California Pizza Kitchen.
California Pizza Kitchen currently retains a Zacks #3 Rank (short-term Hold rating). We are also maintaining our long-term Neutral recommendation on the stock.
Founded in 1985, California Pizza Kitchen restaurants offer pizzas with non-traditional toppings such as BBQ chicken and Thai chicken as well as pastas, salads, sandwiches, appetizers and deserts. The company operates restaurants under three formats: California Pizza Kitchen – a full-service restaurant; CPK/ASAP – a fast-casual format; and LA Food Show – a full-service, casual dining with a varied menu.
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