Luby’s names new chairman, 2 board members
Luby’s on Monday announced a new chairman and two new directors to its board, eight months after winning a contentious proxy fight brought on by one of its investors who pushed for leadership changes amid lagging sales.
Director Gerald Bodzy was named chairman of the Houstonbased restaurant chain, succeeding Gasper Mir, who will remain on the board as an independent director. John Morlock and Randolph Read were tapped as independent directors, replacing Judith Craven, who is retiring, and longtime leader Harris Pappas, who resigned from the board earlier this year. Harris Pappas’ brother, Chris Pappas, remains chief executive.
“We are pleased to welcome Mr. Morlock and Mr. Read to Luby’s board of directors,” Bodzy said in a statement. “We believe both of these talented and experienced leaders will provide considerable value to our board.”
Morlock is a veteran restaurant executive with more than 30 years experience in corporate turnarounds, operations and franchising for chains such as Boston Market, Einstein Bagel and Potbelly Sandwich Works.
Read is chief executive of Nevada Strategic Credit Investments. He was previously an executive with International Capital Markets Group, Wynn Development and Greenspun Corp.
The changes come eight months after Luby’s prevailed in a proxy fight brought on by activist investor Bandera Partners. The New York-based hedge fund, which had been a Luby’s shareholder for more than a decade, lobbied unsuccessfully to replace the Pappas brothers, Mir and board member Frank Markantonis with its own slate of candidates, including former Sen. Phil Gramm, father of Bandera cofounder Jeff Gramm.
Luby’s operates 125 restaurants nationally, including 79 Luby’s Cafeterias, 45 Fuddruckers and one Cheeseburger in Paradise. The company also is the franchiser for 102 Fuddruckers locations across the U.S., Canada, Mexico, Columbia and Panama. The company, which also provides food service to hospitals, corporate cafeterias, sports stadiums and grocery stores, is in the process of selling most of its corporateowned Fuddruckers restaurants to franchisees to focus on its core cafeteria business.
Luby’s reported a $5.3 million loss as it cut six under-performing restaurants from its portfolio during the third quarter ended June 5. The company reported $65.6 million in sales during the quarter, down 15.7 percent from the prior year. Same-store sales fell by 4 percent year over year as guest traffic fell 1.2 percent at Luby’s Cafeterias and 8.7 percent at Fuddruckers.