A disgruntled shareholder of Buffalo Wild Wings has stepped up its campaign to oust CEO Sally Smith, contending in a letter to fellow stockholders that the longtime leader and her team have been “out to lunch as the business has deteriorated.”
Marcato Capital, which claims to control 6.1% of BWW’s outstanding shares, also argues that Smith has lost confidence the brand can be rejuvenated, noting that she has cashed in some of her stock for more than half a million dollars during the last two years.
“If Ms. Smith acts as if she does not believe in the long-term value of the company, why should shareholders believe in her ability to continue as its leader?” Marcato asks in its communication.
BWW has already rejected the offer.
The hedge fund, which is well-known for demanding a role in the management of its portfolio companies, is urging shareholders to elect the four nominees it’s put forth for BWW’s nine board seats.
The investor's picks include industry veterans Scott Bergren, a Yum Brands alumnus with deep brand-development experience; Lee Sanders, a franchising specialist; and Sam Rovit, the onetime president of Oscar Mayer.
The forth nominee is Mick McGuire, the managing partner of Marcato.
Marcato has been sharply critical of BWW’s management since the investor amassed a significant stake in the brand, once one of the few high flyers in the depressed casual-dining market. In particular, it has blasted the company’s management of several hundred stores (a practice the home office has said it would reconsider); slow international development; and loss of its status as an innovator in adopting technology.
BWW has suffered a sales and traffic slowdown in recent months, which it is addressing through a variety of marketing programs, such as discounting wings on Tuesday nights, and several major strategic initiaitives, including experiments with different service formats like takeout- or delivery-only outlets. Marcato has dismissed the efforts as too little too late, characterizing the moves as efforts by Smith and her team to keep their jobs.
"The status quo is unacceptable—oversight and accountability must be restored and CEO Sally Smith must be replaced," it wrote in today's letter to fellow shareholders.
A group representing the franchisees of BWW has pledged its support for Smith and her team in their struggles with Marcato.
The data of BWW's annual shareholders meeting has not yet been announced, but is expected to be scheduled for sometime in May.
Smith was selected in 2009 as the International Foodservice Manufacturers Association’s 2009 winner of the Gold Plate Award, an honor synonymous with being named foodservice operator of the year. She was inducted into the Minnesota Business Hall of Fame in 2012.
The finance specialist joined BWW in 1994 as CFO, when the chain consisted of 35 restaurants. Today, the chain extends to 850 locations in 48 states and two countries.