The days of the square fish and LuAnn plates may be drawing to a close. LubysThe popular Texas cafeteria announced it would sell all of its assets, including real estate, to pay off debts and raise money for its shareholders (NYSE: LUB).
During the period that the company is looking for a buyer for its three restaurant brands, Luby’s, Fuddruckers and Cheeseburger in Paradise, part of its location will remain open to serve customers. The company currently owns 78 Luby’s, 39 Fuddruckers, and a cheeseburger in Paradise. Of these, only 98 are currently open due to restrictions due to the coronavirus pandemic. This emerges from the business results for the second quarter published on Wednesday.
“We believe that continuing this sale process, followed by dividends earmarked as part of a revenue distribution plan, will maximize value for our shareholders while maintaining the flexibility to pursue a sale of the company if a compelling offer of superior value is made will, “Luby’s President and CEO Chris Pappas said in a statement. “This path also offers the potential to promote restaurant operations with well-capitalized owners.”
Austin has four Luby’s locations. Their website shows two open (1410 E. Anderson Ln. And 8176 N. Mo-Pac Expwy.) And two temporarily closed (5200 Brodie Ln. And 415 W. Slaughter Ln.).
That Luby’s might have a cap has been a possibility for some time. In 2019, the company resisted a challenge from an activist investor who wanted to replace members of its board of directors. The restaurant saw a decline in sales as consumers choose quick, casual dining over cafeterias. It made the decision to proceed with a sale after a special committee of its board of directors reviewed the company’s operations in order to find the best way to maximize value for its shareholders.
Luby’s was founded in San Antonio in 1947 and relocated to Houston after Pappas Restaurants owners Chris and Harris Pappas acquired a controlling interest in the company in 2001.
At this point in time, the company’s future is unknown. It could find a buyer who buys the entire business outright, or it could sell its sizeable real estate holdings individually and be forgotten. In the meantime, guests may want to think about their next visit sooner rather than later.