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Godfather's Pizza Chain Replaces Boppell as CEO

January 08, 1985|BRUCE HOROVITZ DONALD WOUTAT..BD: Times Staff Writer

Stung by a sharp drop in earnings and a failed attempt to expand its menu, Godfather's Pizza abruptly replaced its chief executive Monday, just one week after its parent company, Diversifoods Inc., also replaced its chief executive.

Diversifoods said it has named Everett F. Jefferson chief executive of Costa Mesa-based Godfather's. Jefferson had served as president and chief operating officer since September. Resigning as chief executive at the request of the parent company's board was Charles L. Boppell, Diversifoods said.

Boppell, a Santa Ana resident and former Taco Bell president who earned a reputation as a restaurant industry whiz, helped coax Godfather's to relocate from Omaha to Costa Mesa eight months ago when it named him chief executive.

But the company, which employs more than 4,000 nationwide, has no plans to pull out of Costa Mesa where it employs about 100 workers, according to Kenneth E. Pieper, director of investor relations at parent Diversifoods in Itasca, Ill. "I've been proven wrong before, but I know of no plans to move," he said.

Neither Jefferson or Boppell were available for comment late Monday afternoon. Jefferson was in meetings most of the day at the company's new Costa Mesa headquarters. All phone calls were referred to Pieper at Diversifoods.

"It's been a disastrous year for Godfather's," said Edward B. Keaney, vice president at Burns, Pauli & Co., the St. Louis brokerage house. "But the the new management is capable of restoring the luster of the concept." That, however, may require offerings at the 10-year-old company such as thin-crust pizza and pizza by the slice, along with home delivery, Keaney said.

Meanwhile, a shake-up at the top is taking place not only at Godfather's but also at parent Diversifoods. On Jan. 3, Donald N. Smith, the former chief executive of Burger King, stepped down as president and chief executive of Diversifoods. While no chief executive was named, the company created an office of the chief executive that will be jointly run by John M. Creed, president and chief operating officer; William O. Trotter II, chairman; and W. David Hanks, chief financial officer.

The shuffling at the top is the result a disastrous year for Godfather's, which saw an 89% earnings drop in the third quarter of 1984, when income fell to $504,000, compared to $4.76 million during the same 1983 quarter. Fourth quarter results will not be released until February. But Pieper said they will be "down sharply" from 1983's fourth quarter, when income was $8.3 million.

Godfather's has 900 stores nationwide, some 670 of which are franchised. While the company has no immediate plans to close stores, "near-term emphasis will be placed on improving per store sales and profit margins at present company operations," Pieper said. Per store sales in 1984 dropped an average 10% in 1984, he said.

But the biggest headache for Godfather's last year was its costly attempt to introduce pan pizza, one of the industry's most popular dishes. While the company invested millions in a pan pizza introduction, the product was a flop.

"It was an overwhelming disaster," said Burns, Pauli's Keaney. So complex was the recipe for its pan pizza that Godfather's "had guys banging out dough balls at four in the morning," nearly eight hours before the first customer arrived, Keaney said. Not only did labor costs soar, but so did the cost of ingredients. Then, after the company's investment of time and money, the public snubbed its nose at the product.

Godfather's yanked the costly pan pizza, then reintroduced a less-costly version in September.

In May, Godfather's executives said the company would add at least 50 company-owned restaurants in 1984. But during the first nine months of 1984, only five were built and three other company-owned restaurants were shut down, according to Pieper.

Boppell, the departing chief executive, will be retained as a consultant for six months. He recently received a $2.8 million cash payment under a contract agreement made when Godfather's merged with Chart House just two months after he joined the company.

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