The days of square fish and LuAnn platters could be coming to an end. Luby's, the popular Texas cafeteria, announced it will pursue a sale of all its assets, including real estate, to pay off debt and raise money for its shareholders (NYSE: LUB).
During the period while the company looks for a buyer for its three restaurant brands — Luby's, Fuddruckers, and Cheeseburger in Paradise — some of its location will remain open to serve customers. Currently, the company owns 78 Luby's, 39 Fuddruckers, and one Cheeseburger in Paradise; of those, only 98 are currently open due to restrictions stemming from the coronavirus pandemic, according to second quarter fiscal results the company released on Wednesday.
"We believe that proceeding with this sale process followed by distributions contemplated under a proceeds distribution plan will maximize value for our stockholders, while also preserving the flexibility to pursue a sale of the Company should a compelling offer that delivers superior value be made," Luby's president and CEO Chris Pappas said in a statement. "This path also provides for the potential to place the restaurant operations with well-capitalized owners moving forward."
That Luby's could shutter has been a possibility for some time. In 2019, the company fended off a challenge from an activist investor that sought to replace members of its board of directors. The restaurant has seen sales decline as consumers choose fast casual restaurants over cafeterias. It made the decision to pursue a sale after a special committee of its board of directors reviewed the company's operations to determine the best way to maximize value for its shareholders.
Founded in San Antonio in 1947, Luby's relocated its corporate headquarters to Houston after Pappas Restaurants owners Chris and Harris Pappas bought a majority stake in the company in 2001.
At this time, the company's future is unknown. It could find a buyer that purchases the entire business outright or it could sell off its substantial real estate holdings one-by-one and fade into obscurity. In the meantime, diners may want to contemplate making their next visit sooner than later.