Denny's CEO Marchioli out, chairman steps in
Elissa Elan 1 | Jun 10, 2010
Denny's Corp. said late Tuesday that Nelson Marchioli, the company's president and chief executive, resigned and has been succeeded by board chair Debra Smithart-Oglesby on an interim basis until a permanent successor is found.
Marchioli and Smithart-Oglesby had been embroiled in controversy this year as a group of dissident shareholders engaged in a corporate proxy contest to unseat the executives, which they claimed had mismanaged the restaurant company. The dissident shareholder group lost the dispute last month, but speculation had risen that management changes at Denny's would still be made.
"I am a passionate believer in the Denny's brand and I welcome the opportunity to assume this interim role at an important juncture in the company's history," Smithart-Oglesby said in a statement. "As the company nears completion of its transition to a franchise-oriented business model, we have been planning for a transition in leadership."
Smithart-Oglesby also thanked Marchioli for his "dedicated service to the company and the Denny's brand; he has worked tirelessly on its behalf."
Denny's, which operates or franchises the 1,500-unit Denny's family-dining chain, has struggled against declining sales for years. For its latest quarter, which ended in March, Denny's profit remained steady at $4.6 million, or 5 cents per share, compared with earnings of $4.3 million, or 4 cents a share, in the same quarter a year ago.
Latest-quarter revenue fell 17 percent to $137.6 million, which Denny's attributed to the sale of corporate stores to franchisees, as well as a 6.1-percent decline in systemwide same-store sales.
Following Marchioli's resignation, Denny's said it had formed a strategic team consisting of Smithart-Oglesby, chief financial officer Mark Wolfinger, chief administrative officer and franchisee Bill Cox and franchisee Bob Langford, to focus on increasing sales and guest traffic.
"We look forward to bringing a renewed sense of energy and passion to our work to achieve the full potential of this great brand," Smithart-Oglesby said.
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