UPDATE: Sept. 16, 2020: Cracker Barrel appointed Gisel Ruiz to its board of directors on Monday, blocking activist investor Sardar Biglari's attempt to place ally Raymond Barbrick — who had granted Biglari power of attorney to act on his behalf — to the position. Cracker Barrel has added four directors to its board in the past three years as part of its leadership "refreshment process." Ruiz previously served as executive vice president and chief operating officer of Sam's Club, and has held numerous senior executive positions at Walmart. Ruiz will stand for election during the chain's annual shareholders meeting on Nov. 19.
Biglari issued a shareholder letter criticizing this decision on Tuesday, stating that Biglari Capital is "resolved to obtain representation on the board in order to improve capital allocation, and in so doing to augment the value of the Company for the benefit of all shareholders." He added that because Cracker Barrel rejected Barbrick, it needs company stockholders to support his nomination "to enhance Cracker Barrel's value for all."
- Activist investor Sardar Biglari of Biglari Capital and affiliates have nominated Raymond Barbrick, co-CEO and COO of The Briad Group, for a seat on the company's board of directors, according to an SEC filing. This marks the fourth time Biglari has tried to control a spot on the casual dining chain's board, Restaurant Business reports.
- Barbrick controls 8.7% of Cracker Barrel stock through his hedge fund. In the SEC filing, he granted Biglari power of attorney to act on his behalf.
- "The board's Nominating & Corporate Governance Committee will evaluate Mr. Barbrick’s candidacy and make a recommendation to shareholders in due course," Cracker Barrel said in a statement.
Biglari has been sparring with Cracker Barrel for years, most notably pushing the casual chain to sell its fast casual concept Holler & Dash Biscuit House, which he described as "an ill-conceived project destined to fail." Instead, the company bought Maple Street Biscuit company last fall for $36 million, and began transitioning its Holler & Dash locations to the Maple Street banner.
Though Cracker Barrel is continuing to expand its segment offerings with the Maple Street deal, the company ended its foray into eatertainment in March, when it announced it would not invest further in Punch Bowl Social. Cracker Barrel previously purchased a non-controlling stake of $140 million in the popular eatertainment chain, which has struggled with sales under novel coronavirus pandemic conditions.
Biglari wasn't happy with this, either.
"One of the most astonishing aspects of this ordeal concerns the speed and timing of your exit from Punch Bowl Social, for there was no sound justification for abandoning the investment two days before the package of the CARES Act," Biglari wrote in a public letter on April 15. "No rational businessperson would make such an important decision until the legislation had passed and its provisions had been evaluated."
It's unclear how Biglari hopes to position the casual chain going forward, especially as Biglari's own restaurant operations struggle with sales growth. As of June 30, Biglari Holdings has permanently closed 69 Steak 'n Shake locations, according to an SEC filing. The company's sales have been plummeting amid dining room restrictions, but even before COVID-19, Biglari was trying to improve the chain's speed of service, claiming that the restaurant's kitchen design isn't made to process high volumes. Franchisees have also balked at his attempts to discount the menu and shift more stores to counter service.