Luby's prototype debut marks 1st unit in 7 years

Nation's Restaurant News,  Sept 10, 2007  

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CYPRESS, TEXAS -- Luby's Inc., whose largest shareholder in July asked the 128-unit cafeteria operator to explore a sale of the chain or some other stock value booster, has opened its first new restaurant in seven years.

The prototype here would be followed next year by four to six more cafeterias that incorporate its design, said Chris Pappas, president and chief executive of the Houston-based chain. Luby's, which plans to open 45 to 50 new units over the next five years, initially would focus on growing in existing markets in Texas but would consider new markets outside the state.

The prototype features granite surfaces, exposed wood ceilings, terrazzo floors and cherry wood walls. It also has covered outdoor patio seating and a dining counter inside with flat-screen televisions and bar-style seating for single diners. The counter serves as a dessert and coffee bar.

Top shareholder Ramius Group of New York, which in July also proposed that Luby's do a sale-leaseback of its properties to fund stock buybacks and pay a special dividend, suggested the sale possibility shortly after Luby's said it had obtained a $100 million credit line for purposes that could include an acquisition.

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