Struggling polished-casual chain Kona Grill named an interim chief executive officer less than a month after co-founder and CEO Marcus Jundt resigned.
Kona Grill’s chief financial officer, Christi Hing, will serve as the company’s executive officer as the search for a new chief executive takes place. Hing’s appointment was announced in a Securities and Exchange Commission filing.
Hing follows a string of executive changes at Kona Grill. Jundt took over as sole CEO in January, less than two months after Kona Grill said it would try a dual arrangement with Jundt and Rainforest Cafe founder Steve Schussler. At the time, it was Kona Grill’s third CEO move since August, when Jim Kuhn replaced Berke Bakay after a yearlong run as COO. The former chief executive of Chalak Mitra Group stepped down in November.
The chain’s struggles stretch beyond its executive suite.
In January, the Nasdaq Stock Market notified Kona Grill it failed to comply with market rules and could be delisted. According to documents filed, Kona Grill fell below Nasdaq’s listing standard of $15 million minimum market value within the previous 30 consecutive business days.
During the third quarter of 2018, the brand witnessed a same-store sales drop of 14.1 percent, driven primarily by a double-digit decrease in customer traffic. Stacked on the prior-year quarter’s 7.2 percent fall, Kona Grill was on a 20-plus percent two-year decline of comparable results.
Kona Grill’s same-store sales have slid for two years now. They rose 2 percent in 2015 and 0.5 percent in 2016 before dropping 5.9 percent in 2017 and 11.6 percent in the first nine months of 2018.
Kona Grill’s loss is widening, too, after generating profits from 2011–2014. The company swung a loss of $5.1 million, or 39 cents per share, in Q3. In the year-ago period, it was $3.3 million, or 33 cents per share. Revenues dropped 15.7 percent to $37.4 million versus $44.4 million in the prior-year period.
Comparable average-unit volumes have also dropped, falling from $4.5 million in 2016 to $4.1 million in 2017.
The company made strategic moves, including a menu refresh in the summer and another one in the fall, throughout 2018 to help kick start the brand’s turnaround. Jundt said in November the company would “revitalize the Kona Grill brand with what has made us successful over the years. These areas include becoming once again America’s best happy hour with items that provide a great value proposition without significantly impacting gross margin.”
The Chandler, Arizona mall location of Kona Grill closed on Monday, reported Arizona Family.
