Turns out bigger isn’t always better, at least in the eyes of the money guys.
A group of investors is seeking to gain control of casual dining chain J. Alexander’s. While operating just 33 units, the Nashville, TN-based concept’s $116MM in sales has enticed Privet Fund Management LLC, JCP Investment Management LLC, and lone investor Ben Rosenzweig, to seek not just a seat on the board, but an entirely new board. Reports have the three groups owning just over 6% of the outstanding stock (most of it purchased since December of 2011). Net income has been anemic: $513,000 (vs. $2.3MM during the same period in 2010). The takeover group has insisted (as all takeover groups do) it will improve performance, while management claims they are nothing more than corporate raiders.
Kona Grill is another one in flux.
How’s three CEOs in one year?
Marc A. Buehler was fired in June, 2011, replaced by board member Michael A. Nahkunst, who was himself sacked in January, 2012 to make room for Berke Bakay. Bakay just happened to be the investment manager of BBS Capital Fund, the 21-unit grill & sushi chain’s largest shareholder.
Chairman Jim Jundt implied that non-resident management may have contributed to the changes. Kona reported its latest quarter earnings were up 9.2% to $23MM; same-store sales were 7.8% higher, and traffic up 3%. Income was $747,000, as opposed to a loss of $491,000 one year ago.
Happy Valentine’s Day, restauranteurs!
 The proposed new board would include nominees are Ryan Levenson of Privet, James Pappas of JCP, Rosenzweig and Todd Diener, past president of Chili’s.