Steak n' Shake permanently closes 51 restaurants, continuing the chain's dangerous downward spiral toward bankruptcy

• Steak n' Shake is permanently closing 51 restaurants, according to parent company Biglari Holdings' most recent quarterly report.
• The burger chain has been struggling for the last several years, "temporarily" closing over a hundred locations and hemorrhaging millions of dollars as sales plummet.
• Steak n' Shake's turnaround plan relies on selling all corporate-owned restaurants to franchisees, eliminating the brand's dine-in aspect, and inventing a new milkshake machine.
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Steak n' Shake is closing 51 restaurants permanently, according to a recent quarterly report from its parent company, Biglari Holdings.

The hamburger chain's net sales for the first quarter of 2020 were down $60.9 million compared to the first quarter of 2019 — a 36.8% year-over-year decrease.

Steak n' Shake has been struggling to regain its footing for a while. Despite Biglari Holdings CEO Sardar Biglari's efforts to turn the chain around, Steak n' Shake has been hemorrhaging money and locations in the last few years. In 2019, the chain reported a $26 million year-over-year decrease in sales, and "temporarily" closed 111 locations by November.

Steak n' Shake did not respond to Business Insider's request for comment on its restaurant closures.

Shareholders at last year's meeting were skeptical about Biglari's plan to resuscitate the chain's slowing business, the Indianapolis Business Journal reported. The pillars of Biglari's plan included selling corporate-owned Steak n' Shake restaurants to franchisees and inventing a new milkshake machine.

In Steak n' Shake's 2019 annual report released in February, Biglari wrote that he planned to reopen all temporarily closed Steak n' Shake locations as counter-serve restaurants. Biglari noted that from 2008 to 2018, the chain's drive-thru and takeout revenue increased by over 50%.

"Whereas we adopted Henry Ford's pricing philosophy — lower price, higher volume — we failed to implement his highly efficient assembly-line methods. To be a market leader in the fast-food business, we should have paid greater heed to becoming, well, fast," Biglari wrote.

Restaurant concepts equipped with speedy takeout and drive-thru capabilities will be better poised to survive the pandemic, experts say. Biglari's new milkshake machine, however, is not likely to make a difference.