News
Papa Bello chairman's sends open letter to shareholders
January 11, 2010
Papa Bello's chairman and CEO James Price sent a letter to company shareholders yesterday outlining the company's vision for the future.
In the letter, Price tells shareholders about the difficulties the company faced in 2009 and how the new year needs to be one "of restoring confidence and trust in our financial system."
"We have witnessed the weeding out process or the cleansing that I believe is necessary from time to time and that inevitably accompanies a difficult economic environment. In recent times, several restaurant and food service companies, many of whom are highly regarded, have seen their plans and expectations thwarted by events ranging from consumer distress and the tightening of credit markets to rating agency concerns, all of which have upset normal expectations about how a restaurant or franchise business should be run."
Price describes how during the first eight months of 2009, Papa Bello was being managed by the company founder who "had great vision but a limited operating staff and limited working capital to properly advertise, market and support the existing stores let alone look to open new stores and opportunities. During that very turbulent economic time, overall performance continued to decline," Price said.
In August 2009, Aero Financial purchased the controlling interest from the founder and took over operations.
"Since the day of acquisition, we have grown from one corporate and one franchised Papa Bello Pizza location to a total of seven stores in operation and three more under development. With the addition of new qualified personnel, the last quarter of the year has shown the best relative performance, which is gratifying since it is the first quarter under new management and the most important quarter of the year," Price said.
"Late in 2009, we set the stage of becoming a diversified food concept company when we announced the acquisition of the Kebab Cafe and Pastores' Italian Deli," he said. "Beginning in early 2010, we intend to have these concepts fully developed and ready for national franchising.
Since the acquisition, management has worked hard to implement a new operating structure, he said.
"Multiple actions were taken to reduce our cost structure on operating existing and future stores," he said. "Since many of these actions were not taken until the last quarter of the year, we will see the bulk of our efforts and additional savings generated throughout 2010. We have a mindset of viewing expenses as investments, and we will continue to be vigilant about the return on all expenditures.
"I believe that we are well positioned now at Papa Bello to operate through a difficult economy, and we are preparing to be a leader in the industry especially as the economy stabilizes and turns back up. Our goal remains to create long-term wealth for our shareholders. I am proud of our staff and franchisees, over 100 strong. For over four years Papa Bello has served customers through good times and bad, and have continuously adapted to changes in society and the space we so proudly operate in. It hasn't always been easy but our associates have always been up for the challenge. In the future there will be many opportunities for us and we intend to seize them with a bottom line focus on increasing shareholder value."
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