Andrew Wolfson Louisville Courier Journal
Published 4:39 PM EDT Sep 7, 2018
Ailing Papa John’s International may have to close as many as 250 stores within six months if it is unable to reignite sales, an analyst says.
In a research note issued this week, St. Louis-based Stifel says the company’s store sales remained down by as much as 11 percent and that recent aggressive promotions have not curtailed the declines.
That means 150 to 250 restaurants in “non-core” areas, including the Northeast and West Coast, may have to be shuttered, the investment banking firm said.
A Papa John’s spokesman said Friday that it does not comment on analyst projections.
In July, same-store sales at the beleaguered pizza chain plunged 10.5 percent after the disclosure that Papa John’s founder John Schnatter had used a racial slur in a media training session. The trend continued through August, Stifel said.
The company remains under fire not only in the market but also by its founder and single largest stockholder.
In his second lawsuit against the company he founded in 1984, Schnatter alleges that CEO Steve Ritchie has “admitted privately that he launched a false and defamatory campaign” accusing Schnatter of racism “for the sad and simple reason that Mr. Ritchie learned that he was going to lose his job.”
In the complaint, unsealed Thursday in Delaware, Schnatter charges that Ritchie, whom he handpicked as his successor, “placed his own self-interest and desire to salvage his own employment over the best interests of the company all in an effort to save his own job.”
The suit does not elaborate on Schnatter’s allegation that Ritchie fabricated a claim that he was racist.
The suit includes an exhibit identified as a letter to Human Resources at Papa John’s in which Schnatter purportedly details his allegations against Ritchie and others. It remains sealed.
The suit asks the Chancery Court of Delaware, where Papa John’s is incorporated, to enjoin Ritchie from making any statements about Schnatter and to bar a special committee of the company’s board of directors from investigating the company’s management culture.
► Schnatter sues Papa John’s to ‘stop irreparable harm’ to the company
Schnatter also asks the court to invalidate a board-adopted “poison pill” designed to keep him from acquiring a majority interest in the company. Finally, he asks the court to block the board from terminating the contract that made him the company’s spokesman, although the board already has taken that step.
The company has already rejected Schnatter’s claim that the board decided in June to fire Ritchie and bring back Schnatter as executive chairman.
It declined to respond to the allegations against Ritchie, but released a statement saying that “John Schnatter will do anything to distract attention from the harm caused by his inappropriate word.”
The statement also says he continues to make reckless allegations in his attempt to regain control and serve his own interests and that his latest allegations are entirely without merit.
Schnatter filed another suit against the company on July 26 seeking documents that mention him and that he believes will show the “malicious and pre-planned manner in which certain insiders have acted” since the publication of a Forbes article that accused him of using the racial slur.
► ’Papa John’ Schnatter has sent a love letter to his former employees
A trial is set for Oct. 1, but in his new complaint Schnatter says the “ability of the company to repair itself and properly function may not last until October 1.”
The suit unsealed this week accuses Papa John’s directors of breaching their duty of loyalty to the company and causing it irreparable harm.
Schnatter claims the livelihood of its 120,000 employees worldwide is at stake. Papa John’s, the world’s third largest pizza company, has about 5,000 stores – most of them franchises – and employs about 1,200 people in Louisville.
Schnatter says in the suit that its finances are in freefall.
Papa John’s stock was trending down Friday afternoon.
Andrew Wolfson: 502-582-7189; [email protected]; Twitter: @adwolfson. Support strong local journalism by subscribing today: www.courier-journal.com/andreww.
- Papa John's spikes after a report says Papa John is in talks to try and buy back the pizza chain (PZZA)
- Chico’s to close 250 stores, including Soma and White House Black Market locations
- Judge says Papa John's founder entitled to corporate records
- Best Buy's CEO reveals why the company is closing 250 stores
- Pizza Hut is set to make millions of dollars off of Papa John's downward spiral
- Papa John’s Has Much Bigger Problems Than the NFL: Sarah Halzack
- Papa John's is reportedly purging its stores of all signs of its founder (PZZA)
- Pizza Hut Could Use NFL Sponsorship To Gain Edge In Pizza Wars With Papa John's, Domino's
- Papa John’s Founder John Schnatter Apologizes for Racial Slur
- Papa John’s Adopts ‘Poison Pill’ Defense Against John Schnatter
- How do you rebrand Papa John's when the problem is Papa John?
- Shaq Invests in Nine Atlanta-Area Papa John’s Restaurants
- Papa John says he's being scapegoated
- Papa John's scorches Papa John in 800-word response
- Papa John's John Schnatter Allegedly Used Racial Slur On Conference Call
- Papa John's John Schnatter Used Racial Slur On Conference Call, Issues Apology
- Papa John's Is No Longer NFL's Official Pizza
- Papa John's Asks White Supremacists To Stop Buying Its Pizza
- Papa John's Founder Accuses Media Agency Of Extorting Him Over Racial Slur
- Papa John's Founder Sues Pizza Chain Over Internal Documents Request
Analyst says Papa John's may have to close up to 250 stores have 896 words, post on eu.courier-journal.com at July 25, 2018. This is cached page on Movie Breaking News. If you want remove this page, please contact us.