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Shares of Papa John's slid on Wednesday after a report surfaced alleging that founder John Schnatter used the N-word during a conference call in May.
According to an article by Forbes, Schnatter was on a call with marketing agency Laundry Service when he tried to downplay comments he made about the National Football League and allegedly said, “Colonel Sanders called blacks n-----s," and complained that the KFC founder never faced public backlash. The call was a role-playing exercise for Schnatter to prevent future public relations fumbles.
Shares - Papa - John - Percent - Low
Shares of Papa John's fell by as much as 5.9 percent to a new 12-month low of $47.80 a share in intraday trading Wednesday following the report. The news erased $96.2 million in market value. Papa John's is down 12.5 percent year to date while Domino's shares are up 47 percent over the same time period.
"Papa John’s condemns racism and any insensitive language, no matter the situation or setting," a company spokesman told CNBC. "Our company was built on a foundation of mutual respect and acceptance."
Laundry - Service - Sports - Agency - Owner
Laundry Service, which is owned by sports agency owner Casey Wasserman, reportedly cut ties with an unnamed client in late May due to "the regrettable recent events that several employees of Laundry Service witnessed during interactions with a client’s executive,” according a letter obtained by Bloomberg.
Shelley Lewis, a spokeswoman for Laundry Service, declined to comment.
Relations - Consultant - Eric - Schiffer - Chairman
Public relations consultant Eric Schiffer, chairman of Reputation Management Consultants in Irvine, California, told CNBC that it was a "colossal boneheaded move of which they will now have to rethink if they want to use him as a spokesperson."
The incident underscores the risks of using an individual to represent a brand, said crisis...
(Excerpt) Read more at: CNBC
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