Papa Murphy’s will close 16 of its company-owned stores and give its online sales strategy an upgrade, the Vancouver-based pizza company announced Monday morning.
The company didn’t name the stores to be closed but said they will be in “several markets.” Company-owned stores are separate from Papa Murphy’s 1,357 franchise locations.
In the announcement, Jean Birch, chairwoman and interim CEO, said the company has “a clear opportunity to reduce short-term losses while giving new owners a more profitable portfolio from the start.”
Papa Murphy’s will also partner with Olo, a New York technology company, to revamp its online and mobile ordering so that sales can be linked to third-party delivery services, such as Uber Eats and Postmates, as long as those services are offered near the customer.
“We continue to believe convenience is a big opportunity for us, and we are confident that Olo is the right partner as we upgrade our digital platform,” Birch said in the release.
The two announcements mean Papa Murphy’s will incur a one-time $7.4 million expense on its balance sheet, though it expects to save $1.9 million annually. Share prices should improve, too, the company said.
Papa Murphy’s in January hired a consulting firm to help sell off company-owned stores. The strategy has been to shift from pizza sales and instead focus revenue growth on royalties and franchise fees.
The take-and-bake pizza purveyor, headquartered near Vancouver Mall, went public in 2014. Its growth has been dwarfed by large pizza companies that have put on a premium on marketing, and it has faced litigation from franchisees.
Its stock fell 61 percent last year, from $11 per share to start the year to $4.22 at the end. Traded on the Nasdaq Exchange as FRSH, Papa Murphy’s Holdings Inc. closed at $4.67 Monday, down 9 cents.
With delivery, the company is altering its model slightly. Papa Murphy’s had in the past traded the expenses of delivery drivers and ovens in order to afford higher quality ingredients, banking that customers would “take-and-bake” at home.
In April, Papa Murphy’s announced its first tries at delivery by partnering with Amazon Restaurants.
Noah Glass, founder and CEO of Olo, said Monday the company was “excited to make this incredible bake-at-home pizza more convenient and accessible than ever before.”
