Towards the end of 2018, Papa John’s CEO Steve Richie, spoke at a Louisville chamber of commerce luncheon where he openly admitted that his company was going through a rough time. Papa John’s had gone through 14 years of steady growth, but it had gotten to an unprecedented losing streak that led to sales declining and closing of mounting stores.
However, in March 2019, Richie went ahead and stated that the company was enjoying a moment of stability. The CEO was positive that the Company’s future was in good hands, and with time, it would fully stabilize. Richie’s comments happen to be after Papa John’s received $200 million from Starboard Value as an investment. The money provided a much needed financial cushion to a company that was already struggling. The deal also included the addition of new board members and has now brought new life to Papa John’s.
Later on, after Starboard had already invested $200 million, it exercised an option that allowed additional $50 million worth of investment to indicate that the firm had seen some promising results from the first deal.
While trying to rebuild, Papa John’s also brought on board a new public face; Shaquille O’Neal. He is now the company’s spokesman, board member as well as an investor. O’Neal’s deal will see him receive $8.25 million for over three years.
Steve Richie has been working relentless, and with everything so far, the company is building a legitimate turnaround. At Wall Street, Papa John’s share price rose by about 40% starting from February. Richie and his team urge patiency from the investors as the company sets to deliver better sales performance. The big question remains if Papa John’s can turn around pizza sales that declined remarkably by 7.3% in North American restaurants in 2018. Rebuilding does not take a day, but Steve Richie is positive the company will re-establish itself.