Another investment firm is taking a leading role in Famous Dave’s of America and bringing in a new CEO — the barbecue chain’s sixth since 2012.
Mike Lister, who was appointed 13 months ago, will be succeeded by Jeffery Crivello, a board member since August, Famous Dave’s announced Monday.
Crivello has served as chief financial officer at PW Partners Capital Management, a hedge fund that just acquired about $1.5 million in Famous Dave’s shares and said it would be the standby purchaser in a share offering designed to raise $5.5 million. The company will use proceeds of that sale for working capital and to lower debt.
“It truly is an exciting time to become a part of the Famous Dave’s team,” Crivello said in a statement. “My focus will be on improving the existing value proposition, while expeditiously addressing the development and evolution of the Famous Dave’s concept.”
The company reported a net loss of $18 million, or 26 cents a share, for the three months ended Oct. 1. Revenue was $100 million, down from $109 million a year ago.
Comparable sales at franchise-operated restaurants fell 2.1 percent, a smaller rate of decline than the 3.8 percent seen in the same period last year. Comparable sales at company-owned units rose about 1 percent, the first positive performance since 2013.
The company is in process of selling off its corporate-owned stores to franchisees. It operates 152 locations, with 16 company units and 136 franchisee restaurants. That’s down from 176 a year ago. Eight of the company’s restaurants in Maryland and Virginia were sold to franchisee Elliott Baum during the most recent quarter.
Thirteen locations have closed since July in California, Indiana, Maryland, Virginia.
“Over the last year, I have been intently focused on improving restaurant operations while closing underperforming restaurants that do not meet our financial standards, in order to allow for the [sale] of our company-owned restaurants to franchisees,” Lister said in statement. He added the time was right for a leadership change.
Revolving CEO door
Crivello praised Lister in the statement and said there was still room for the company to lower expenses and allow franchisees to deliver more value.
The company has seen a revolving door in its executive suite and various ideas on menu and strategy since the 2012 departure of Christopher O’Donnell, who was the last CEO to lead it for more than 18 months.
Promotions such as the Smokin’ Deals program were launched in May but have failed to deliver big gains yet. The Minnetonka-based company is seeing more success with a new premium cocktail initiative that is in most locations, executives said.
Moderately priced restaurants from Famous Dave’s to Cheesecake Factory have come under pressure from customers who are moving to cheaper fast-food.
They are looking to spend $4 to $8 on burgers, pizza or tacos instead of $10 to $20, according to Wedbush Securities.
Applebee’s, Joe’s Crab Shack, Old Country Buffet, Noodles & Co. Outback and Ruby Tuesday have also closed a number of their locations. Last month, Romano’s Macaroni Grill filed for bankruptcy and said it would close 37 of its 116 locations.
Famous Dave’s stock price has declined more than 20 percent in the past year.