Goldston resigns at Einstein/Noah Bagel Chairman will assume chief executive's duties

Restaurant industry

December 30, 1997|By BLOOMBERG NEWS

GOLDEN, Colo. -- Einstein/Noah Bagel Corp. said yesterday that Mark Goldston resigned as chief executive, vice chairman and a director, as the bagel-restaurant operator pursues a plan to buy out its franchisees.

Goldston's duties will be assumed by Chairman Scott Beck, 39, who also is chairman and president of Boston Chicken Inc., which owns 53 percent of Einstein/Noah.

Einstein said it won't seek a new CEO because Beck is familiar with its operations.

Goldston, 43, will return to consulting, including for Boston Chicken. The resignation comes after Einstein/Noah's stock fell 82 percent this year amid the plan to buy its franchisees, which analysts expect will hurt the company's earnings for more than a year.

"Goldston was more of a start-up guy," said Lehman Brothers Inc. analyst Mitchell Speiser. "His role was done. Now they need to execute. Now they need to move to the next level."

Einstein/Noah shares fell 12.5 cents to $5.4375 in trading of 420,700 shares, exceeding their three-month daily average of 337,300. Boston Chicken shares rose 3.125 cents to $6.5625.

The stock of the chain of chicken restaurants has declined as Boston Chicken pursues a plan to shore up its operations by taking over 14 area franchise units. The move will eliminate revenue from royalties and franchise fees.

The similar strategies of the two chains won't change under Beck's stewardship, analysts said.

"I think Beck's increasing role will be viewed with caution," Speiser said. "Boston Chicken has stumbled with its expansion strategy. The question is whether he will push Einstein too hard. But I don't think the strategy will change."

Earlier this month, Golden, Colo.-based Einstein converted loans franchisees into a 77 percent equity ownership of its 546 locations, a spokesman said.

Jeff Butler, 36, Einstein/Noah's president, will continue overseeing day-to-day operations. Butler was named a director.

Goldston joined Einstein/Noah in April 1996 after consulting for the company and Boston Chicken, which also is undergoing a reorganization that includes buying out franchisees of its Boston Market restaurants.

Goldston was a former Reebok International Ltd. marketing chief credited with turning around the footwear company in the late 1980s. He jumped to L.A. Gear with a handful of other top footwear executives in 1992 to help revitalize that company's fortunes.

Goldston, the author of "The Turnaround Prescription," a book on how to turn a business around, wasn't able to fix L.A. Gear, a company he once called one of the worst corporate situations he had ever encountered. He resigned in June 1994.

A year later, he was hired by Converse Inc. as a consultant.

Pub Date: 12/30/97

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