Denny’s to Move From Irvine to Small City in S. Carolina
For some Denny’s Inc. employees, the thought of having to relocate from their pristine planned-community townhouses here to a small Southern town in the rolling hills of rural South Carolina is too much to bear.
“A lot of them aren’t going to do it,” one worker predicted Friday. He added that many consider the move to the heart of Dixie “a painful thought.”
But for others, life in a town where open space is plentiful, the seasons actually change and a three-bedroom, two-bath house goes for about $100,000 proves all too enticing.
“I see it as a good opportunity,” said LaVonne Hogan, a Denny’s office services worker. “California is going into a recession.”
The choice will be faced by many of the 500 employees who now work at Denny’s Irvine headquarters. The company, which operates the nation’s largest chain of coffee shops, announced Thursday it would close its Irvine office complex and consolidate operations in Spartanburg, S.C., where its parent, TW Services Inc., is located.
The relocation will mean the elimination of about 400 jobs in Southern California. Those who are being offered the chance to transfer, however, will face a difficult dilemma: deciding whether to move nearly 3,000 miles to begin a new life or face trying to find a new job in a slumping economy.
Denny’s said it will retain about 100 employees in Southern California. Company officials said an undisclosed number of workers will be laid off and the rest will be asked to relocate to Spartanburg, a city proud of its rural character and sausage biscuits.
How rural? Spartanburg County, situated between Charlotte, N.C., and Atlanta, Ga., has 220,000 inhabitants, compared to Orange County’s 2.3 million.
The median family income in Spartanburg is $30,200; it’s $48,800 in Orange County. But housing is a bargain, with the average price of a three-bedroom home about $100,000; in Orange County the same house would cost nearly 2 1/2 times that.
“You can buy a mansion for the price of a shack,” said one Denny’s worker.
But for all its back-country charm, Spartanburg hardly has the amenities of big-city life. Atlanta, the closest metropolis, is several hours’ drive away. And so is the beach--in a state not exactly known for its surfing.
The consolidation of Denny’s into its parent has Spartanburg excited. While the city is bracketed by shopping centers, the downtown is betting on an enlarged TW Services to revitalize the city.
“It’s one of the best things that’s happened in the last 20 years,” said Jack Frazer, vice president for economic development at the Spartanburg Chamber of Commerce. He said Denny’s will join the likes of Westinghouse Corp., Autolite Spark Plugs and Owens-Corning as corporations that have relocated operations recently in the county.
But the announcement surprised Denny’s employees, particularly since it comes little more than a year after the company moved its headquarters from La Mirada to the mirror-skinned, sprawling Park Place office complex next to the San Diego Freeway.
“It’s up in the air for me,” said one worker, who declined to divulge his name. But, he added, others are enticed by the prospect of lower housing costs.
Hogan said she hopes to make the move. She said her husband is a Marine now serving in Japan who wants to transfer to South Carolina.
While no timetable for the move was announced, the consolidation is expected to take two to three years.
The company also announced a management shake-up. Sam Maw, the longtime TW executive who has served as president of the 1,300-restaurant Denny’s chain for three years, will take a new position as senior vice president for product development for TW.
He will be replaced by Bernard Scott, Denny’s vice president for East Coast operations.
Roger Shively, vice president in charge of human resources, said that about 20% of Denny’s corporate employees will be retained in Irvine to manage the El Pollo Loco chain of Mexican-style charbroiled chicken restaurants and Denny’s West Coast operations.
For those who are laid off, he said, the company will be providing severance pay based on length of service, bonus pay to stay during the transition and help with placement in new jobs at other companies. He said that more clerical workers than middle- and low-level managers are being laid off.
Maw said that he believes the move will strengthen the company as a whole. He said he leaves Denny’s with some of its highest sales levels ever, with a program to renovate restaurants and with revised menus that brought back pot roast, liver and onions, and many of the other traditional favorites that people were accustomed to finding at the chain.
Saying he leaves with “mixed feelings,” Maw added: “We’ve made a lot of progress. The people here have been great.”
Denny’s, which began as a doughnut shop in 1953, underwent a face-lift in 1987 after it was bought by TW Services. Menus were updated, restaurants were renovated and the work force was slashed by about 25%. Since then, the revenues and profits of the restaurant chain have grown.
In the first six months of this year, Denny’s reported earnings of $58.7 million, up nearly 20% from the $49 million in earnings for the same period in 1989.
TW Services, a $3.5-billion conglomerate, also owns the Canteen Inc., El Pollo Loco, Hardee’s and Quincy’s Steakhouse chains.
