Sbarro hopes to regain piece of the pie

The slimmed-down version of Sbarro Inc., the Melville-based pizza and pasta chain that emerged from bankruptcy in late November, is still in need of some seasoning, its new chief executive said the other day.

People in Long Island's real estate industry say they have had talks with Sbarro about the company moving its headquarters from Melville to, perhaps, Woodbury. But James Greco, who became Sbarro's chief executive the first week of February, said whether it moves or not will make little difference. What will make a difference, Greco said, is whether the company succeeds in its plan to "rejuvenate the brand."

The private-equity firm MidOcean Partners bought Sbarro in 2007 from the founding Sbarro family for $417 million, just as the economy cratered. Food and other costs rose. Foot traffic in malls, where many Sbarro outlets are located, dropped. Domino's Pizza Inc. and other competitors chewed at Sbarros' market share. Sbarro filed for Chapter 11 bankruptcy protection last April.

The company said 70 percent of its debt was eliminated and it has access to $35 million in fresh capital. But locations were closed; staff was reduced.

"Our plan focuses on four areas: people, places, products and positioning," Greco said. There will be some hiring; some locations will be renovated and some new locations will be added next year; there will be some tinkering with the menu, and decisions will be made on branding -- marketing and advertising.

Adam Hanft, chief executive of Hanft Projects, a marketing and branding firm in Manhattan, sees little cause for optimism at this point.

"They're primarily mall-based, and mall traffic is flat to down," Hanft said. "The restaurants in malls that used to be as boring as [Sbarro] are increasing their menu choices."

Greco, former head of Vermont-based bagel and sandwich chain Bruegger's Enterprises, and who has been in the food business all his adult life, is undeterred.

"Sbarro has a lighter debt load and a better capital structure now," Greco said. "Now we're about to focus on the areas that were neglected" in the past.