Marriott Will Stress Lodging, Pare Fast Food

Marriott Corp. today announced a major restructuring, including the sale of its fast food and family restaurant businesses, in an effort to reposition the company for the next decade.

The company also said that it has completed the sale of its airline catering division to a group of senior managers for $570 million. That sale was expected to yield more than $200 million for Marriott.

“As we move into the 1990s, we want to sharpen Marriott’s focus on mega-markets in lodging and contract services which together have an estimated aggregate potential of more than $400 billion in industry annual sales,” J. W. Marriott Jr., chairman and president, said in a news release.

“We believe the restructuring will help the company to grow at 15% to 20% per year from our 1989 profit base for continuing operations,” he added.

The plan calls for the sale of 358 company-operated Roy Rogers fast food restaurants in the Middle Atlantic states in the first quarter of 1990. Those stores were expected to register about $400 million in sales this year.

Marriott also said it intends to sell the 434 units operated by its family restaurants division, including 235 Bob’s Big Boys, 79 Wags, 31 Bickfords, 57 Howard Johnsons and 32 Allies restaurants. In total, these restaurants had 1989 anticipated sales of about $440 million.

The company also announced it has repurchased 32 million shares, or 24%, of its common stock over the last three years, leaving 104 million outstanding.

Marriott said one of the company’s key objectives is to be a leader in each of its segments.

“We have concluded that it is unrealistic for us to continue to pursue this goal in ‘stand-alone’ restaurants,” Marriott said.

“In fast food, we have a strong regional concept in a highly competitive segment dominated by a handful of national chains. In the family restaurant segment, competitive conditions have changed significantly within the past year, and we believe it now is too difficult . . . to become number one,” he said.

The company, headquartered in suburban Bethesda, Md., expects to record pretax restructuring charges and write-offs of between $225 million and $250 million on continuing operations in the fourth quarter of this year.