Australian restaurant chain Guzman y Gomez's attempt to build a burrito empire in the Chicago area came to an sudden halt Friday when the company closed its Naperville store and seven other locations.
The fast-casual chain that sells burritos, margaritas and nacho fries made its first foray into the U.S. market in 2020 when it debuted its store at 1519 N. Naper Blvd. in Naperville. There were also restaurants in Evanston, Schaumburg, Crystal Lake, Buffalo Grove, Deerfield, Des Plaines and Chicago.
Plans had been announced to open a second location this year at 844 S. Route 59 as well as two more Chicago stores, none of which will now be built.
Sales had been poor and didn't justify keeping the restaurants open or expanding the chain, co-CEO Steven Marks said during a Thursday earnings call with analysts and shareholders.
"This means ceasing to trade at our restaurants from today and proceeding with an orderly wind up of our operations in the U.S.," he said. "Notwithstanding the progress made by the team, the financial performance of the U.S. has simply not been acceptable."
Guzman y Gomez helped bring Mexican food to Australia and remains popular throughout much of East Asia. It runs several hundred restaurants in Australia, Japan and Singapore, and will open another 32 restaurants in Australia this fiscal year, said Marks, who co-founded the chain in 2006.
Marks told analysts he spent the last three months in the U.S. trying to save the business, but the Chicago-area operations were troubled from the start.
"Starting with suburban drive-thrus has made it difficult to build brands in the U.S.," he said. "Chicago has also been difficult. What is important is that we make changes when we need to."
The shutdowns were unexpected.
"(The previously announced new) sites will obviously not open," Chief Financial Officer Erik Du Plessis told analysts. "We're working with the parties involved in those sites to wrap up amicably."
Marks and his partner, Robert Hazan, both Americans, told the Naperville Sun in 2020 that business concept for Guzman y Gomez stemmed from their inability to find authentic Mexican food in Australia. With the success they found in their adopted homeland and East Asia, they cast their sights on the American market, he said.
After a lot of research, Naperville seemed like a good place to start, Marks said.
"We chose Naperville because of the community," he said. "We kept hearing about this city, which is ranked as one of the best places to live in the U.S., and the moment we arrived here and saw the site, we knew this was where our first U.S. restaurant had to be."
