Marcato Capital Management, the activist investor, calls for the Buffalo Wild Wings, Inc. (NASDAQ: BWLD) to replace its chief executive officer Sally Smith. Shares of Buffalo Wild Wings increased 4.2% after the announcement.
“The status quo is unacceptable — oversight and accountability must be restored and CEO Sally Smith must be replaced,” wrote Mick McGuire, the founder of Marcato.
He wrote that Buffalo Wild Wings’ board has “blindly stood by management as the company experienced sustained declines in customer traffic, comp-store sales, margins, returns on capital and guest experience ratings, made flawed capital deployment decisions, and continues to dismiss the merits of a more highly-franchised business.”
Marcato owns 6.1% of the Buffalo Wild Wings’ outstanding stock, and nominated McGuire to join the board along with Scott Bergren, Sam Rovit and Lee Sanders on Thursday.
Buffalo Wild Wings responded in a statement saying that “under CEO Sally Smith's leadership since its IPO in 2003, the Company has generated total returns for shareholders of 1697%. In fact, $10,000 invested in Buffalo Wild Wings stock at the IPO was worth more than $175,000 on March 31, 2017.”
“The Company has continued to innovate and pursue cost savings initiatives amid difficult market conditions for the sector and remains focused on creating sustainable value for our shareholders,” the company said.