Once again, Famous Dave's has a new CEO

For the second time in less than six months, Famous Dave's of America Inc. introduced a new chief executive.

In a surprise announcement made after the markets closed Thursday, the Eden Prairie-based smokehouse chain said Wilson Craft resigned as CEO, a position he had held since March. The company named Chief Operating Officer Christopher O'Donnell, a 10-year Famous Dave's executive, to replace Craft.

The sudden departure of Craft comes at an inopportune time for Famous Dave's, which has struggled to grow sales in the face of high commodity costs and a weak economy. Famous Dave's shares closed Thursday at $9.08, down more than 50 percent from September 2007.

"I think it would be disappointing to see a turnover this soon," said Mark Smith, an analyst with Feltl & Co. in Minneapolis.

"This definitely puts a hiccup in the company," Smith said. "There is nothing fundamentally wrong with this company. It's a good business. But when you have a CEO leave and then bring in a new CEO and then he leaves, little red flags pop up. It's tough for some investors to get over."

When then-CEO David Goronkin left the company in December after four years at the helm, Famous Dave's conducted a nationwide search before settling on Craft, a 25-year industry veteran who had served as executive vice president of operations for Atlanta-based Longhorn Steakhouse.

Craft and his wife had planned to move to Minnesota after their daughter, now a junior in high school, started college, Famous Dave's Chairman Jeffrey Dahlberg said in an interview Thursday. But the commute between Atlanta and Minneapolis proved too much for Craft, who announced his intention to resign last week, Dahlberg said. (Craft did not receive a severance package, the company said.)

The company quickly promoted O'Donnell, whose experience and familiarity with Famous Dave's franchisees should help soothe the transition, company officials said. "That's a big plus," Dahlberg said.

Said O'Donnell: "You want stability through familiarity, but also a spirit of change that will galvanize the company."

O'Donnell has his work cut out for him. Sales at franchise-operated restaurants open for at least 24 months, a key indicator of growth and profitability, fell 1.4 percent in the second quarter. The company also warned that it may have to write down the value of some of its restaurants and implement an earlier-than-planned 2 percent price hike to help offset higher pork and chicken prices.

O'Donnell hinted that changes will be coming.

"We need some time to look at the businesses," he said, noting that the company had brought back founder Dave Anderson as a "culinary consultant."