Chipotle to close up to 65 stores amid turnaround effort

Chipotle Mexican Grill on Wednesday said it would close up to 65 stores as part of a restructuring plan championed by the company’s new chief executive, Brian Niccol.

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Company officials said during an investor call that Chipotle would add delivery options on the chain’s mobile app for roughly 2,000 restaurants this year and add pick-up windows for digital orders at store locations to speed up transactions. Chipotle also plans to launch a new customer loyalty program in 2019, he said.

Chipotle said the new initiatives and the closures of as many as 65 stores would result in $115 million to $135 million in overall charges, including roughly $50 million to $60 million in its second quarter. Company shares fell more than 3% in after-hours trading.

"All our efforts will focus on making the brand more engaging, visible, and culturally relevant while our restaurant teams are dedicated to providing an excellent guest experience with great hospitality and real food cooked to perfection,” Niccol said in a press release. “Specifically, this will include three big initiatives – revamping our marketing communications and plans, leveraging our second make line to grow digital sales and expand access, and engaging with our customers by launching a new loyalty program in 2019.”

Niccol, who spearheaded a series of successful menu changes and marketing campaigns at Taco Bell, said Chipotle will also experiment with new menu items. The company announced earlier this week that it had begun testing quesadillas, milkshakes and other new choices at its New York test kitchen, with plans for an eventual nationwide rollout.

Chipotle has struggled in recent years after menu fatigue and a series of food safety issues impacted foot traffic at its stores. However, shares are up more than 40% since Niccol took over as CEO on March 5.