Luby's in McAllen

There's a group that I'm part of that eats at Luby's on Mondays.  Its a familiar place and an easy place to go.  It seems that I see a whole lot of different types of locals there as well.

Luby's is obviously popular in McAllen as there are 3 locations as well as 4 others in the adjoining cities.  I was talking with these regulars and found out a bit of history about our cafeteria restaurant.

The unusual compensation of Luby's managers ( a 40% cut of profits) as well as a historical rising market in the glory days (1970s-1980s) led to a lot of seniority of these managers.  Our North 10th location is nearly 40 years old and has primarly had 2 managers, John Armstrong and Dennis Daughtry.  They are well known in the community.  At one time John left to start his own restaurant, the Northside Cafe.  It was short lived ( they say there was too much debt and too much overbuilding) and it became a Mexican restaurant, La Mexicana.  Many local restaurateurs got their start in the Luby's training program.

In the early 60s, the original location on South 10th St. was managed by Herbert Knight, who was a legendary figure in Luby's history.   He managed the store from 1960 to 1971 and after a "woeful beginning" due to a historic freeze, he build the location into the most profitable cafeteria in the entire organization [according to his obituary].  I presume his success led to the second location in La Plaza Mall less than 1 mile away.  People still talk about the long lines to get in there when there were much fewer restaurant choices.  He went on to have a top management job in Luby's Corporate.

Now there are many choices to make and Luby's continues to do things much the same way as always, for better or worse.  That has led to new financial challenges as the company is publicly traded and was the subject of a proxy fight in early 2018. The challengers, Jeff Gramm and former US Senator Phil Gramm (father/son) wanted to break up the organization since they argued that the value of the owned real estate was greater than the going concern value. 

The incumbents Harris and Chris Pappas (of Pappas Restaurant fame) won the battle but it stands to be found out who will win the war.  As of today the stock price of NYSE: LUB is $1.52.  Lower than $1.00 and it will be delisted from the stock exchange.