- July 5, 2020
Bloomin’ Brands, the Tampa company that owns popular restaurant chains Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar, has come under fire from one of its investors, New York-based hedge fund Barington Capital Group.
Barington blames Bloomin’ CEO Liz Smith, who also serves as board chairwoman, for the company’s lack of growth and shareholder value over the past few years, which has seen annual revenue decline from $4.44 billion in 2014 to $4.21 billion in 2017. Bloomin’ Brands’ stock price has also slumped, declining by 8.34% this year. As of Oct. 26, Bloomin’ shares were trading at $19.41.
In a letter to Jim Craigie, the board’s lead independent director, Barington called for Carrabba’s, Bonefish and Fleming’s to be spun off into a separate company so Bloomin’ can focus on the performance of Outback, its top brand. Barington did not call for Smith to be removed as CEO, but it wants an independent board chairperson to be appointed.
In a media release, Bloomin’ Brands states it has had seven discussions with Barington since March 2017 “to better understand its views and suggestions.”
Smith, in the release, states Bloomin’ has seen a rise in sales and market share over the past three quarters as a result of “investing in food quality, service, and ambience” at its 1,500 restaurants, which can be found in 48 states as well as Puerto Rico, Guam and 19 other countries. She adds that a reduction in overhead has allowed Bloomin’ to invest in improvements to its digital and IT infrastructure.
Craigie says Smith has the backing of the board, stating in the release, “We fully support the management team and its successful ongoing efforts. The company welcomes shareholder dialogue and any constructive input that may advance our goal of delivering superior returns for investors.”