Papa John’s appoints new CEO
US struggling pizza maker Papa John’s has appointed Arby’s president Rob Lynch as its new chief executive. Mr Lynch, a fast-food industry veteran, will replace Steve Ritchie.
It’s the biggest shakeup since activist shareholder Starboard Value set its sights on the pizza company. In a statement, chairman Jeff Smith cited Mr Lynch’s “proven record transforming organisations and realising the growth potential of differentiated brands”.
Papa John’s, which operates about 5,300 locations globally, has been facing slowing sales, with revenue declining 12% in 2018. Founder John Schnatter, whose image had once been deeply ingrained with the company’s marketing, agreed earlier this year to resign from the board and dismiss a lawsuit related to his departure last year as chairman.
Papa John’s woes grew last summer after the founder used a racial slur on a conference call, which he said was taken out of context. Papa John’s shares rose around 1.5% for a small gain over the past year.
Starboard has invested $250m (€225m) in Papa John’s since February. Mr Smith, Starboard’s CEO, became chairman of the pizza maker when they took the stake. The pizza maker’s shares fell 29% in 2018 and 34% in 2017.
In Ireland, the Papa John’s franchise is owned by Supermac’s boss Pat McDonagh. Mr Lynch joined Inspire Brands-owned Arby’s in 2013 as the roast-beef sandwich chain’s chief marketing officer.
Before that, he worked at Procter & Gamble and Yum Brands as vice president of brand marketing for Taco Bell. He was appointed president of Arby’s in 2017 overseeing marketing, operations and development.
At Arby’s, Mr Lynch led the chain’s heavy meat-focused marketing and bold ad campaigns that poked fun at vegetarians. Arby’s has more than 3,300 restaurants across the world.
In 2014, Arby’s hit social-media marketing gold when it started a back-and-forth with recording artist Pharrell Williams over Twitter over his hat, which resembles the restaurant chain’s logo.
Starboard is known for its turnaround of Olive Garden owner Darden Restaurants.
Mr Smith’s proxy fight to replace Darden’s directors included a nearly 300-page power point presentation that called for several specific changes at the Italian-dining chain, including adding salt to the water when cooking pasta.
