A Chicago-based businessman and philanthropist has entered into an agreement to purchase 32 existing Luby's locations in Texas and ownership of the Luby's brand.
The potential value of the deal between Calvin Gin and Houston-based Luby's is estimated at $28.7 million and will likely result in 1,000 employees at the restaurants keeping their jobs, according to a news release.
While Gin acquires the restaurants and brand, Luby's retains the real estate to sell separately. The newly formed company under Gin will become Luby's Restaurant Corporation once the transaction is closed.
"We are so pleased to be able to acquire the operation of these Luby's Cafeteria stores, one of the iconic brands in the Texas restaurant market," Gin said.
"This transaction will allow us to continue serving the many loyal Luby's customers at these locations and to provide long-term employment opportunities
for the many associates currently at these locations," he said.
Gerald Bodzy, Chairman of the Board of Luby's, released a statement too.
"I could not be more pleased than to see Calvin Gin, along with many of the existing management team, able to carry on the fine tradition of Luby's brand
of food and service in Texas that dates back to 1947," Bodzy said.
The sale is part of a previously announced plan by Luby's to sell its assets, pay its liabilities, and return remaining cash to shareholders.
The plan was approved by shareholders in November of last year.
Gin is a member of family that established The Flying Food Company. It has grown into the third largest airline catering company in North America and
provides food services for others, including Starbucks.
Gin held several roles in the family business, including vice president.
Luby's announced last week it has entered into an agreement to sell its Fuddruckers restaurants.
The financially-troubled company pegged its property and assets at around $104 million in June 2020, but owed $57 million in long term debt and nearly $23 million in lease obligations.
As of last June, 46 Luby’s were in operation in Texas with nine located in San Antonio.
There were 17 Fuddruckers locations.
Bob Luby opened the first Luby’s in San Antonio in 1947. It was a popular stop for families for lunch after church services on Sundays.
Chris and Harris Pappas took over San-Antonio based Luby’s in 2001 and moved its headquarters to Houston.
The brothers hoped to turn around the chain known for its comfort foods and LuAnn Plater.
David Littwitz of Houston-based Littwitz Investments, which handles restaurant real estate sales, told Texas Public Radio last year that Luby’s cafeteria has simply fallen out of style over the years.
He said they were very popular among families for decades, but time has passed them by.
“Everybody could get want they wanted. Dad could get a steak, the kids could have mac-n-cheese,” Littwitz said.
He said younger diners want something a little fancier and healthier.
“The last time they were in a cafeteria was in high school… or college,” he said.
He added some older diners that Luby’s relies on are staying home and dining in because of the pandemic.
Littwitz predicted then the entire chain would not be purchased by one buyer, but rather by a number of smaller buyers in piecemeal fashion, with each Luby’s operating up to point-of-sale.
He said Luby’s large buildings are also a problem for many restaurant buyers who are seeking smaller accommodations.
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