Robert Hartnett, former CEO of Einstein/Noah Bagel Corp., of Golden, CO, has been named chief executive officer of the company. Gail Lozoff, local founder of Bagel & Bagel, has been appointed chief concept officer. Robert Ellis has been named chief financial officer. Also, Paul Strasen has been named vice president and general counsel.
The new management team, in place since October 2001, brings significant new operational, concept development and financial skills to Houlihan's.
Hartnett says that while the company has strong brand recognition in its markets, Houllihan's needs to restructure its debt, reorganize its operations and improve its balance sheet in order to succeed in today's highly competitive casual dining marketplace.
"After reviewing the various alternatives available, we concluded that utilizing the Chapter 11 process to complete our restructuring was in the best long-term interests of the company and its constituents," he says. "Houlihan's has a rich history and we intend to focus our resources on providing our guests with the highest quality dining experience available.
"Today's restaurant consumer demands innovative menu selections in a distinctive dining environment," Hartnett adds. "By availing ourselves of the Chapter 11 process, we expect to be able to improve profitability and make necessary improvements to the business including the evolution of our menus and brands, thereby creating a strong competitive future for Houlihan's operations."
Hartnettt says that as part of its plan to concentrate resources on operations with the strongest potential for future growth, Houlihan's closed 28 under-performing restaurants since October. For example, it closed the Houlihan's in Denver next to the Tamarac Shopping Center near Interstate 25 and East Hampden Avenue. It quickly was taken over by a sports bar.
A retail broker in Denver tells GlobeSt.com that the sports bar received a ''great deal'' on the lease.
Houlihan's also announced it has received a commitment for up to $10 million in debtor-in-possession financing from a bank group led by Fleet National Bank, which, subject to court approval, will augment the company's liquidity to provide adequate funding for operations during the reorganization period. The company expects to generate positive cash flow during fiscal 2002.
Hartnett says that while the company completes the restructuring, its operations will continue as before. Daily operations will continue without interruption. Employees will continue to be paid and vendors will be paid for post-petition purchases of goods and services in the ordinary course.
The company intends to seek court approval to honor gift certificates and other customer programs.
"We have been in contact with many of our major vendors, and anticipate that they will continue to support and do business with Houlihan's during the reorganization period," Hartnett says. "With the support of our suppliers and customers, and the hard work of our employees and franchisees, Houlihan's will emerge from the restructuring process a stronger, more competitive business."
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