Logan’s Roadhouse CFO James Hagan has stepped down as CFO of Logan’s Roadhouse, just three months after accepting the position. Edmund Schwartz, former chief administrative officer at Pet Supplies Plus, will take the helm as interim CFO. Schwartz is the third CFO to take the job this year. Amy Bertauski resigned the position in February.
Logan’s has been fighting against waning sales and a heavy debt load. Third quarter sales reflected a 4.3% decrease, while average check cost increased 4.6%. This may be a reflection of the poor year for Logan’s parent company, LRI Holdings Inc., which recorded a $6 million net loss in Q3. The company has $380 million in long-term debt, according to SEC filings.
Logan’s Looking for a Solution
Logan’s Roadhouse will need an innovative new leader to dig itself out of this slump. How can a CFO drive innovation? According to Rick Puckett, CFO of snack company Snyder’s-Lance, being a CFO is about more than saying no. In a recent interview with Forbes, Puckett stated that an effective CEO can encourage innovation by being fully engaged financially in the innovation process and by establishing clear product and profitability goals. Additionally, he emphasizes that strategic partnerships with marketing, sales, and supply and chain management are essential.
In the food industry in particular, Puckett maintains transparency is a main factor in innovation. He cites a recent trend in consumer demand for simpler ingredients and labeling on food products. Not all consumers are looking for “better for you” items, but 33% are, which is an important demographic to consider, according to Puckett. He attributes his company’s recent success in offering a balanced ratio of “better for you” and indulgent items.
Can Logan’s Roadhouse take a page out of Snyder’s-Lance’s book? At this juncture, it couldn’t hurt to try. Instead of continuing to raise prices on its meals, Logan’s might want to consider a new approach by offering transparency in its food preparation practices and adding a range of menu items, from completely indulgent to health conscious.
The question is whether Edmund Schwartz is the right man to take the helm and lead innovations for the ailing chain. Only time – and quarterly earnings – will tell.