Career Education plans to close Le Cordon Bleu schools
Schaumburg-based Career Education Corp. Wednesday announced that it will start a gradual process of closing its Le Cordon Bleu North America schools.
Le Cordon Bleu will no longer enroll new students after the January 2016.
Career Education had been trying to sell the schools and had been involved in advanced negotiations with a potential buyer interested in all the Le Cordon Bleu campuses. These discussions did not lead to an agreement.
Students enrolled in the program now can continue classes at Le Cordon Bleu campuses which are expected to remain open until September 2017. In May 2015, the company announced a "teach-out," stating that students making reasonable academic progress will have the opportunity to complete their program.
Running the program has been a struggle.
"New federal regulations make it difficult to project the future for career schools that have higher operating costs, such as culinary schools that require expensive commercial kitchens and ongoing food costs," said Todd Nelson, president and CEO of Career Education. "Despite our best efforts to find a new caretaker for these well-renowned culinary colleges, we could not reach an agreement that we believe was in the best interests of both our students and our stockholders."
Le Cordon Bleu North America offers hands-on educational programs in culinary arts, as well as patisserie and baking, to students at 16 campuses nationwide, including at 361 W. Chestnut in Chicago. Other towns include Atlanta, Georgia; Austin and Dallas, Texas; Boston, Massachusetts; Las Vegas, Nevada; Los Angeles and San Francisco, California.
The company contributed about $128.2 million and $172.6 million of revenue and $43.5 million and $66.6 million of operating losses for the nine months ended Sept. 30 and for the year ended Dec. 31, 2014, respectively.
The company expects to record approximately $52 million to $64 million of restructuring charges related to students finishing their classes at Le Cordon Bleu campuses.
These costs primarily relate to severance and retention charges of about $12 million to $14 million; costs associated with exiting lease obligations, net of estimated sublease income of approximately $35 million to $40 million; among other charges.