The firm could turn to its value-building playbook for restaurants in this latest engagement with Bloomin’ Brands.
in BLMN for investment purposes. Earlier this month, Starboard entered into an advisor agreement with David C. George, a retired restaurant executive who served in various roles at Darden for nearly 17 years, with respect to the firm's investment in BLMN.
Despite having great brands, Bloomin' has lost the confidence of the market and fallen behind on various operational metrics, but its main problem is lagging same store sales and issues generating traffic due to somewhat of an identity crisis in how it operates the Outback restaurants.
The primary opportunity here is to improve operations, mainly from a top line level but also by cutting costs. This can largely be accomplished by restoring Outback to its former family-friendly steakhouse glory and shifting away from the more complex and competitive"bar and grill" model. If there is anyone with the experience to do this, it is Starboard's Jeff Smith, who led significant shareholder value creation at both Darden and Papa John's.
There are also very compelling strategic opportunities to create shareholder value. Bloomin' would get more value in selling some of its undervalued assets, such as Fleming's, its upscale steakhouse business. There has been a lot of M&A in the high-end steakhouse space: Ruth's Chris was
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