HARLINGEN — Luby’s Inc. restaurants in Texas were handed a lifeline with the announcement Monday that its 32 locations in the state will be sold to entrepreneur Calvin Gin.
Luby’s said almost all employees at the Texas locations would be offered positions by the buyer to remain working at those locations.
What this all means, is that the Luby’s restaurants in Brownsville, Harlingen, McAllen and Pharr will continue to operate, pending the finalization of the $28.7 million purchase. All or most of the cafeteria-style eateries were about to close for good as the company was going through liquidation.
“We are so pleased to be able to acquire the operation of these Luby’s Cafeteria stores, one of the iconic brands in the Texas restaurant market,” said Calvin Gin. “This transaction will allow us to continue serving the many loyal Luby’s customers at these locations and to provide long-term employment opportunities for the many associates currently at these locations.”
The Gin family founded The Flying Food Group, which has become a major player in the airline catering business. The company also provides food preparation services to other companies, including Starbucks.
Under the terms of the tentative sale, Luby’s will retain ownership of real estate in the company’s portfolio.
“The structure of the transaction will allow Luby’s to sell its real estate related to its cafeteria restaurant business to third parties and realize the related value for its shareholders,” Luby’s said in a statement Monday.
“I could not be more pleased than to see Calvin Gin, along with many of the existing management team, able to carry on the fine tradition of Luby’s brand of food and service in Texas that dates back to 1947,” said Gerald Bodzy, chairman of Luby’s board.
Luby’s cafeteria-style eateries were in financial trouble long before the COVID-19 pandemic hit. As diners’ tastes changed and alternative dining options increased, the impact on Luby’s was significant, forcing the company to reduce the number of its locations by one-third since 2015.
According to the restaurant data firm Technomic, Luby’s U.S. sales have been dropping an average of 13 percent a year during that time.
