Red Robin CEO Paul Murphy will retire at the end of the year, ending an agreed-upon three-year term at the casual-dining chain.
Red Robin hired Murphy in October 2019 amid a takeover attempt by disgruntled shareholder Vintage Capital. The restaurant veteran told Red Robin’s board at the time that he would stay for three years as a “transitory leader” to help improve the struggling chain’s operations, according to an SEC filing.
After Murphy’s contract is up at the end of 2022, he will help the board look for his replacement and will stay with the company as an adviser until March 31, 2023, to ensure a smooth transition, according to the filing.
Much of his time at 520-unit Red Robin was spent guiding the chain through the pandemic. It has been slower to rebound from the crisis than some of its casual-dining counterparts, finishing 2021 with sales down 10% compared to 2019, according to Technomic data. The shortfall was largely related to its struggles finding staff. But executives have expressed optimism about the continued strength of Red Robin's off-premise business, its large loyalty program and its partnership with the Donatos pizza chain.
“It has been my pleasure and privilege to lead this iconic brand,” Murphy said in a statement. “While the events experienced during my tenure were certainly not what I had anticipated when I accepted the role in 2019, I’m proud of the work that we have done in strengthening the core of the brand and positioning it for the future.”
Murphy took over Red Robin during a tumultuous period for the Greenwood, Colo.-based chain. An operational change at the restaurant level had led to slower table turns and unhappy customers. Sales and traffic fell, as did the company’s stock price. Then-CEO Denny Marie Post stepped down amid the troubles in April 2019. Murphy was named her permanent replacement six months later.
The day his hiring was announced, Red Robin rejected an acquisition offer by Vintage Capital, which had been unhappy with the chain’s turnaround efforts up to that point. The investor had asked for a say in deciding the chain’s next CEO after Post retired.
Those problems ultimately gave way to new challenges in the form of the COVID-19 pandemic, which struck less than a year into Murphy's tenure.
“We appreciate Paul’s leadership during this turbulent period and all the work that he and his team have done to navigate the storm of the last three years,” said Board Chair Dave Pace in a statement Wednesday. “As was his intention when he joined Red Robin, Paul has stabilized the foundation and positioned the brand for renewed growth going forward.”
Murphy developed a reputation as a turnaround artist during his 20-plus-year restaurant career. He began at Bennigan’s and moved to Einstein Noah Restaurant Group in 1996, eventually rising to president and CEO. In 2009, he left Noah to take the helm at Del Taco, where he oversaw a brand repositioning and a return to sales growth. In 2017, he became executive chairman of Noodles, undertaking a similar turnaround effort at that chain.
Murphy is the latest in a string of departures among chain-restaurant CEOs. Starbucks, Domino’s, Wingstop, Darden, Brinker and Denny’s have all seen leadership changes this year.
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