Easyriders Seeks Direction as the Road Gets Rough

Easyriders Inc., whose namesake magazine has for almost three decades celebrated a biker fantasy lifestyle in which all women are topless and all motorcycles are Harleys, marks a first today: a stockholders meeting.

But don’t expect a raucous party at the seemingly incongruous setting of a Westlake Village hotel.

Shares of Easyriders, which made its American Stock Exchange debut in September, have fallen off a cliff. A plan to open a chain of Easyriders Cafes--a concept championed by Chairman John E. Martin, a former Taco Bell chief executive, and others who took over the company--has been abandoned. And in the wake of announced changes to the magazine, some hard-core biker types are grumbling that the new management does not embrace the Easyriders ethos.

Some longtime subscribers complain that the content isn’t as raunchy and the pictured women appear to be “models who’ve never even seen a bike before,” in the words of one critic.

But change is relative. Martin said the magazine still does not have a place on his coffee table.

“I’m not sure it’s appropriate for a family setting,” said Martin, 53, who is also chairman of Irvine-based Diedrich Coffee Inc.

Along with motorcycle pictorials, industry news and product reports, the latest issue of Easyriders includes a “Heavenly Hooter Quiz” and snapshots of women baring their chests at biker events.

Compared with some of the 10 other magazines published by the company, however, Easyriders is the group’s Atlantic Monthly. Among them is Tattoo Savage, which celebrates extreme tattoos as well as body-piercing.

But with circulation for its flagship magazine dropping, Martin concedes that the company is going after a more affluent readership--including so-called rich urban bikers, or RUBs.

“It’s like a big costume party,” said Martin, a weekend biker for 37 years. “I think part of the appeal is that [RUBs] want to do something a little bit naughty, a little bit outlawish.”

In the franchising field, Easyriders Inc. already had about 30 retail outlets in which it sold themed clothing and motorcycle accessories.

More branding is the key to the company’s hoped-for turnaround, executives say. Shortly after taking over the company, Martin told a weekly business publication that his plan to make Easyriders a “world-class brand” included themed restaurants. That’s hardly a surprise considering his track record at Taco Bell, where he was credited with expanding that chain from minor-player status into a heavyweight of fast-food franchising. But in recent interviews, executives said the eatery plan has been scrubbed.

“America has fallen out of love with themed restaurants,” said Easyriders Chief Executive William E. Prather, whose resume includes executive positions at Burger King and Hardee’s.

Prather, 51, oversees Easyriders’ operations in a nondescript, two-story building in Agoura Hills. The site, identified as the home of Easyriders only by a discreet door sign, could be the home of any small company. On Prather’s wall are pictures of him shaking hands with Presidents Reagan and Bush.

“You look at what has happened with Planet Hollywood and Rainforest Cafe,” Prather said. “Lots of pizazz, but the food is terrible. America has come to expect crummy food in those places.”

Another big factor is image. Naming a family restaurant after a magazine that recently featured an “unswimsuit” pictorial was not a prime example of synergy.

“I would say [image] is the No. 1 outstanding issue for us,” said Martin, who adds that he has sunk $17 million of his own money into Easyriders Inc. “I don’t think we have an answer for that yet. We’ve done a lot of focus groups. We’re putting a lot of research into that.”

Martin said he hopes stockholders, who have seen the shares fall from a high of $4.25 at its debut to $1.31 on Wednesday, will be patient as executives redefine the company after a slow start.

How did the highly respected, clean-cut executive get involved? In 1997, after leaving Taco Bell under something of a cloud--his plan for a low-fat menu fizzled--he took over Newriders, a small company that owned two franchised Easyriders Cafes. To help him redirect Newriders, he brought in Prather, who had started the El Paso Bar-B-Que restaurant chain.

When Easyriders came up for sale, Martin engineered mergers that put Newriders and El Paso under the Easyriders mantle.

Longtime Easyriders Publisher Joe Teresi stayed on to head the magazine division.

The mixture of businesses caused confusion.

“People are looking at us and asking: ‘What is this? Is it a motorcycle company? What is this restaurant thing?’ ” said Prather, who put $3 million of his own funds into the company. “We’ve been trying to play the restaurant part of it down, even though the [El Paso] restaurants have been doing very well.”

The company’s financial outlook has improved of late, at least in deficit control. In the first quarter ended March 31, Easyriders reported a loss of $1.8 million on revenue of $11 million. That’s down from a $5-million loss on sales of $11.5 million for the quarter ended Dec. 31.

Easyriders’ circulation has declined from 325,700 in 1994 to 220,400 last year, according to the Audit Bureau of Circulations.

Today, shareholders will be told that Easyriders is bringing in a corporate public relations firm.

Its tricky task: to acquire new subscribers while keeping the loyalty of the old guard, such as Beverly Hills real estate broker Mary Cummins, 33, a critic of Easyriders’ new editorial direction.

“They shouldn’t be cleaning it up so much,” she said.