Shake Shack Investors Love the Idea of 'Chicken Shack'

NEW YORK (TheStreet) -- Shake Shack (SHAK) investors are clucking for joy over the possibility of a new concept focused on chicken -- and they should be.

According to CNBC, a Shake Shack subsidiary called "SSE IP" filed a trademark application on April 20 for the words "chicken shack." At present, Shake Shack only has one chicken item on its menu -- a chicken sausage. 

A Shake Shack spokesman declined to comment via email on its potential plans. "We don't have any other new items to announce besides the ParkBurger, which we were thrilled to start serving yesterday, when we reopened the Madison Square Park Shack," said the spokesman.

Shares recently jumped 6% after earlier hitting a new high as investors apparently responded to the notion of an expanding portfolio of unique brands for Shake Shack.  

The under-the-radar filing for "Chicken Shack" is unlikely to follow standard fast-food and casual dining industry practices in order to grow.



Most fast-food chains load up their menus with new items, or sometimes introduce limited-time offerings, in order to boost their sales. Shake Shack's "fast casual" rivals typically undergo one or two menu refreshes a year, usually involving the introduction of new sandwiches or appetizers. 

Instead, Shake Shack may be looking to employ a very different tactic of developing a standalone concept that does just one thing very well. In the case of a Chicken Shack, this might mean selling creative chicken sandwiches similar to how Shake Shack now sells premium burgers. While less common in the food industry -- Chipotle has been testing a separate Asian concept, as well as a new pizza restaurant -- the strategy is frequently employed by retail goods companies. Think Gap (GPS) with its Banana Republic, Gap, and Old Navy stores, or Macy's (M) and its higher-end Bloomingdales division.

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