Luby’s plans to close even more locations amid lagging sales

PHOTOS: Did you know? Luby's, the Houston' based chain, has already closed eight restaurants and plans to close more. >>Here are some facts about Luby's, including where it's oldest restaurant is located... less PHOTOS: Did you know? Luby's, the Houston' based chain, has already closed eight restaurants and plans to close more. >>Here are some facts about Luby's, including where it's oldest restaurant is ... more Photo: Houston Chronicle Photo: Houston Chronicle Image 1 of / 29 Caption Close Luby’s plans to close even more locations amid lagging sales 1 / 29 Back to Gallery

Luby's has closed eight restaurants since May to shore up debt amid lackluster sales.

The Houston-based chain said Friday that the restaurant closures raised $11.6 million toward paying down the company's $39.5 million in outstanding debt. The company, which owns most of its locations, plans to close more restaurants to raise between $25 million and $45 million.

"We believe positioning our company to have lower debt, improved same-store sales throughout our restaurant portfolio, and a lower overall cost structure will enhance our returns," President and CEO Chris Pappas said in a statement.

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Luby's in its most recent quarterly earnings report said it operates 160 Luby's cafeterias, Fuddruckers and Cheeseburger in Paradise restaurants nationally. It's unclear how many of the closures will take place in Houston.

The company reported $86 million in sales during the third quarter, down 3.1 percent from the same period last year. Same-store sales fell by 0.9 percent. Pappas attributed the sales decline to rising costs and lower guest traffic.

Luby's isn't only closing restaurants to raise money to pay down its debt. Last month, the chain came to an agreement with Pappas to reduce his annual base salary to $1, from $500,000, according to federal filings.