Papa Murphy's

Papa Murphy’s reduces staff in cost-cutting effort

“Strategic realignment” expected to save operator $1.5 million a year

Papa Murphy’s Holdings Inc. is eliminating certain management positions and corporate personnel in what it calls a “strategic realignment of resources” that is expected to save $1.5 million a year, the company said on Wednesday.

“While it’s always a difficult decision to affect people, this realignment is necessary to ensure the business is as efficient as possible while we remain laser-focused on the support of our franchise owners and field staff as we all execute on our key strategies,” Papa Murphy’s interim CEO Jean Birch said in a statement. “Operating with an efficient cost structure is critical to the health of the company and is in the best interest of all of our stakeholders, including our franchise owners, employees and shareholders.” 

The move comes as the 1,600-unit, Vancouver, Wash.-based pizza chain works to recover from steeply falling same-store sales.

Papa Murphy’s fourth-quarter same-store sales fell 7.8 percent. The company’s stock, which traded at nearly $13 a share last May, has fallen to just over $4 per share. The company reported a net loss in the third quarter. 

The weakening results led to the departure of CEO Ken Calwell, with Birch named as his interim replacement. 

The operator is working to rebuild business with several initiatives. Papa Murphy’s plans to refranchise company-owned units, preferably with franchisees that could help develop specific markets. 

In January, Papa Murphy’s launched its first national advertising campaign in a bid to drive brand awareness in markets where its take-and-bake outlets are more novel. It is also testing delivery. 

“We see significant long-term opportunity for profitable growth at Papa Murphy’s,” Birch said. “We are confident we now have the right structure, team and strategies in place to enable us to drive our brand forward and create long-term value for all shareholders.” 

Contact Jonathan Maze at [email protected]

Follow him on Twitter: @jonathanmaze

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