Taco Bell Chief Antioco Moving to Blockbuster
Taco Bell Corp. President John F. Antioco, a leading contender for the top job at PepsiCo Inc.'s planned restaurant company, abruptly resigned Tuesday to become chairman and chief executive officer of the struggling Blockbuster Entertainment video chain.
Antioco, 47, who engineered a successful turnaround at Circle K Corp. prior to joining Taco Bell eight months ago, will join Blockbuster, a Viacom subsidiary, on July 1. He will succeed Bill Fields, a former top Wal-Mart Stores Inc. executive who quit unexpectedly in April after acknowledging that the chain’s first-quarter results would be far worse than expected.
Antioco’s departure from Taco Bell prompted speculation that PepsiCo has selected another executive to lead the huge restaurant company that will be created when the soft drink and snack food giant spins off Taco Bell, Pizza Hut and KFC later this year.
Antioco said Tuesday that he was a “top contender” for the new restaurant company’s top job but that his decision to leave Taco Bell after just eight months was independent of PepsiCo’s planning process for the new company. Antioco said he has been talking to Viacom Chairman Sumner Redstone for about a month.
Antioco’s departure marked the third major shift in Taco Bell’s senior management in little more than a year. Longtime Chairman John Martin left in October 1996 to make way for Antioco, who became president and chief executive. In April 1996, President Kenneth E. Stevens had resigned to take a job with an Ohio bank.
“That kind of rapid change usually isn’t good,” Antioco said. “But Taco Bell is enjoying some terrific successes right now, the company has a great strategy in place and a senior team of managers in place to develop strategy.”
In a related announcement, PepsiCo Chairman and Chief Executive Roger Enrico said that the new restaurant company’s management team will be named “in the next couple of weeks.” A Taco Bell spokeswoman said that Antioco’s successor would be named at the same time.
Antioco will now head the nation’s dominant video rental chain, with 5,300 locations nationwide and $3 billion in annual revenue. But Dallas-based Blockbuster has been hurt by an overall weak market for video rentals.
Industry analysts say that Blockbuster also has failed to adequately cash in on growing consumer preference to buy videos rather than rent them. And the company’s profit margins were drained by Fields’ ill-advised bid to drive revenue through the sale of apparel, magazines, books and candy as well as higher-than-expected costs to relocate the corporate headquarters from Florida.
Fields, who now heads Canada’s Hudson Bay chain of stores, also alienated some Hollywood studios by squeezing them to lower prices in much the same way Wal-Mart does to its suppliers.
Blockbuster’s troubles have alienated investors who had high hopes in 1994 when Viacom acquired the chain for $8.4 billion when it was headed by H. Wayne Huizenga. Viacom Chairman Sumner Redstone envisioned Blockbuster as a machine that would create cash that Viacom could use to pay down nearly $10 billion in debt from its purchase of Paramount Communications.
Redstone effectively dictated Antioco’s mandate on May 29 when told Viacom shareholders that a Blockbuster turnaround is “the overriding issue for us right now.”
Analysts say that Antioco’s first step will be restoring the chain’s strategic direction.
“They’re going to have to refocus on the basics,” said David Doft, an industry analyst in New York with Furman Selz. “Redstone has already laid out that plan. And, after they get back on track with a renewed emphasis on video rentals, then they can let John Antioco do his thing.”
Among the major hurdles facing Antioco, Hollywood executives say, will be deciding the future of Blockbuster’s troubled music retail operations, devising a better marketing plan than its previous, much-criticized “one world” campaign and maintaining a decent relationship with Redstone, one of the most hands-on executives in entertainment.
Analysts say that Antioco might be better suited to Blockbuster’s needs than Fields, who spent most of his career with Wal-Mart--and whom Redstone once mentioned as his possible successor at Viacom.
“Bill Fields had a ‘big box’ operation background and John Antioco is more familiar with small store operations,” Doft said. “The test will be if he can use Blockbuster’s good name to restore market share . . . and if he’s on the same page as Sumner Redstone.”
Antioco, who joined Taco Bell last October, is credited with reversing a six-quarter slide in same-store sales. He previously held management posts at Southland Corp., which owns the 7-Eleven retail chain, and was chief operating officer for eyeglass retailer Pearle Vision. Prior to joining Irvine-based Taco Bell, he helped pull the Circle K chain out of bankruptcy. He subsequently completed Circle K’s initial public stock offering and later brokered the chain’s sale to Tosco Corp.
Times staff writer James Bates in Los Angeles contributed to this story.