Look no further than Barry Florescue, 44, who has been Horn & Hardart's
chairman and chief executive officer since 1977.
An accountant by training, Florescue (pronounced Flor-ES-cue) bought six
Burger King franchises in Florida and Long Island in the early 1970s and was on
the lookout for others.
He spotted Horn & Hardart, its automated cafeterias had fallen on bad times,
and the company had lost direction, veering haphazardly into the mail-order
catalog business and fast-food franchises, primarily Burger Kings. "What
attracted me to Horn & Hardart," remembers Florescue during an interview in New
York City's glamorous Crown Building, "was its Manhattan development rights for
Burger King."
In 1977 Florescue picked up 4% of horn & Hardart for less than $400,000 and
took control via a proxy fight The company was losing around $3 million a year
at the time. Florescue quickly sold the failing restaurants or converted them
into Burger Kings. As a result, shares outstanding have grown from 700,000,
when Florescue arrived, to 14.8 million now. For all the dilution, the stock
was still hot. Adjusted for splits, it climbed from around $2 in the late 1970s
to $29 by 1983.
Panting for expansion money and eager to show profits on the greatly swollen
capitalization, Florescue sold the company's valuable real estate, most of it in
Manhattan. The real estate sales have contributed $23 million to reported
profits over the past three years.
What did Florescue do with the money? Better you shouldn't ask. "I did
exactly the reverse of what most entrepreneurs are accused of doing," Florescue
boasts. "I just washed my hands of operations. My role was to look for
acquisitions and to get involved in other external things for the company such
as politics, going to trade functions and becoming a true chairman."
One of Florescue's first acquisitions was the Royal Inn Americana, a Las Vegas
casino Horn & Hardart acquired for $14.7 million in December 1979, In less than
two years the casino drained the company of $6 million. Florescue sold it to a
partnership controlled by his longtime pal Donald Schupak, Horn & Hardart
still owns 10% of the casino, holds a $14.5 million mortgage on the property and
guarantees $5.8 million in loans to the casino.
Seven years ago Florescue sank another $2 million of Horn & Hardart's money
into a pizza-and entertainment concept called Mark Twain's Riverboat, which
failed, although one restaurant still lingers. Then came a nonstarter called
Goodbody's, a health-food hamburger idea that had already been tried without
success by D'Lites of America.
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