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BUCA: "A sad day for a vibrant concept"
"It's a sad day for a vibrant concept," sighed restaurant analyst-turned investment banker Allan Hickok. "There were a number of missteps along the way. Some historical, some not so historical."
He referring to the acquisition, announced today, of Buca di Beppo by Planet Hollywood for $9.7 million, or 45 cents a share. Hickok, who covered Buca for years, reminds me that it's likely $4 million of that amount went to "interested parties," namely, bankers, lawyers and top executives.
If his math is correct, the 88-unit chain sold for a paltry $6 million. That's pretty sad.
"I don't know what to say about the sale," said Buca Inc. founder Phil Roberts. "It's two failed companies. I guess they deserve each other."
Beset by management fraud that brought about costly lawsuits (and the imprisonment of former top management) and, recently, a slumping economy, Buca Inc. has struggled over the past four years, during which time it hasn't turned a profit.
Some observers cite the hangover effect of mismanagement for the Buca's slow decline. Others carp that new managers -- among them, Chairman Wally Doolin, CEO John Bettin and CFO Dennis Goetz -- had plenty of time to fix what ailed it, only didn't.
If one is to judge performance by recent share price, you might side with the latter. When Doolin arrived in early '05, a share of BUCA changed hands for about $6. Today, a share is worth 42 cents. Still, Doolin and his team promised the company would seek strategic alternatives. It would appear that has been accomplished.
Doubt still lingers. "I don’t think this [sale] is the solution for this company. There are chronic issues need to be addressed," Hickok said, adding high prices are one.
Planet Hollywood is no slouch when it comes to financial performance issues. Just three years after its much-publicized IPO in April '96, the Orlando-based company filed for protection against creditors, shuttering a half-dozen units amid mounting debts in the process. Buca, for its part, needs to close at least a dozen unprofitable units, company officials have said.
In Oct. '01, Planet Hollywood was back in bankruptcy court, blaming the Sept. 11 attacks for a significant drop in sales and traffic. It has since become a private company controlled by British-born CEO Robert Earl.
BUCA: "A sad day for a vibrant concept"
August 6, 2008
"It's a sad day for a vibrant concept," sighed restaurant analyst-turned investment banker Allan Hickok. "There were a number of missteps along the way. Some historical, some not so historical."He referring to the acquisition, announced today, of Buca di Beppo by Planet Hollywood for $9.7 million, or 45 cents a share. Hickok, who covered Buca for years, reminds me that it's likely $4 million of that amount went to "interested parties," namely, bankers, lawyers and top executives.
If his math is correct, the 88-unit chain sold for a paltry $6 million. That's pretty sad.
"I don't know what to say about the sale," said Buca Inc. founder Phil Roberts. "It's two failed companies. I guess they deserve each other."
Beset by management fraud that brought about costly lawsuits (and the imprisonment of former top management) and, recently, a slumping economy, Buca Inc. has struggled over the past four years, during which time it hasn't turned a profit.
 |
| Buca packed 'em in, at first. |
Some observers cite the hangover effect of mismanagement for the Buca's slow decline. Others carp that new managers -- among them, Chairman Wally Doolin, CEO John Bettin and CFO Dennis Goetz -- had plenty of time to fix what ailed it, only didn't.
If one is to judge performance by recent share price, you might side with the latter. When Doolin arrived in early '05, a share of BUCA changed hands for about $6. Today, a share is worth 42 cents. Still, Doolin and his team promised the company would seek strategic alternatives. It would appear that has been accomplished.
Doubt still lingers. "I don’t think this [sale] is the solution for this company. There are chronic issues need to be addressed," Hickok said, adding high prices are one.
 |
| Pre-bankruptcy: CEO Robert Earl and Bruce Willis celebrate. |
Planet Hollywood is no slouch when it comes to financial performance issues. Just three years after its much-publicized IPO in April '96, the Orlando-based company filed for protection against creditors, shuttering a half-dozen units amid mounting debts in the process. Buca, for its part, needs to close at least a dozen unprofitable units, company officials have said.
In Oct. '01, Planet Hollywood was back in bankruptcy court, blaming the Sept. 11 attacks for a significant drop in sales and traffic. It has since become a private company controlled by British-born CEO Robert Earl.
Posted by David Farkas on August 6, 2008 | Comments (1)
August 7, 2008
In response to: BUCA: "A sad day for a vibrant concept"
Frequent Diner commented:
In response to: BUCA: "A sad day for a vibrant concept"
Frequent Diner commented:
Let's face it, with all the focus on obesity, Buca was a flawed concept. Last time we ate there, we left more food than we actually ate.
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