Barington Capital Group reiterated its demands for changes at Bloomin’ Brands Inc., the owner of Outback Steakhouse, including spinning off smaller restaurant brands and appointing an independent chairman.
The New York-based hedge fund, run by James Mitarotonda, says Bloomin’ Brands Chairman and Chief Executive Officer Elizabeth Smith is to blame for underperformance at the company, according to a letter sent to its lead independent director Monday. Barington owns about 0.6 percent of the common shares in the Tampa, Florida-based company, according to a person familiar with the matter.
“It is our belief that the company’s disappointing share price performance is primarily the result of poor operating execution and poor strategic and capital allocation decisions under Ms. Smith’s leadership,” Mitarotonda said in the letter reviewed by Bloomberg. “In the absence of enhanced board oversight or the appointment of a new CEO, we expect such disappointing performance to continue.”
Barington, which originally raised its concerns about the company’s direction in February, once again urged the company to hire advisers to pursue a spinoff or sale of Bonefish Grill, Carrabba’s Italian Grill and Fleming’s Prime Steakhouse & Wine Bar to allow Outback Steakhouse to operate independently.
Barington said it has been denied meetings with Smith despite repeated requests. Mitarotonda pointed to about $269 million of impairment losses and restaurant closing expenses over the past five years as evidence of Smith’s poor execution and capital allocation. Barington has run activist campaigns at Darden Restaurants Inc., Avon Products Inc. and Xerium Technologies Inc., among others.
A representative for Bloomin’ Brands wasn’t immediately available outside regular business hours.
It’s not the first time Bloomin’ Brands has been targeted by an activist. Last year, Jana Partners, the sometimes-activist fund run by Barry Rosenstein, built a stake in the company before reaching a settlement in February that saw a new independent director appointed to the company’s board. Jana subsequently exited its investment.
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