Bravo Brio Restaurant Group Inc.’s largest shareholder has taken a big step to get more involved in company operations with the nomination of three independent directors last week.
TAC Capital LLC, owner of 15 percent of Bravo Brio stock, on Friday nominated three people to the board and urged the Columbus, Ohio-based casual-dining operator to add them as directors immediately. The investment firm said that the company would benefit from the infusion of independent directors.
“As a shareholder, we believe the board would benefit from the addition of new independent directors, and we expect the director candidates will offer to the board new perspectives, strengths and experiences with their backgrounds in restaurant operations, finance, management and strategic planning,” Donald Adam, chairman at TAC, wrote in a letter to the board last week.
In a statement, Bravo Brio said it acknowledged receiving the letter and that it would “always consider constructive input.”
"Bravo Brio Restaurant Group is committed to executing a business strategy aligned with the best interests of the company and all of its shareholders,” according to the statement. “The company regularly engages in open and transparent dialogue with its investors and will always consider constructive input that helps drive long-term shareholder value."
TAC has been buying up shares of Bravo Brio for months, but initially filed as a “passive” investor, meaning that it didn’t plan to push management to make changes or nominate board members.
The filing late last week signals that it is getting off the sidelines and pushing for changes.
TAC recommended three people for the board, including Jimmy Loup, founder of the 17-unit Grub Burger Bar and a former joint venture partner at Outback Steakhouse.
The firm also recommended James Wolfe, president of financial services firm The Adams Corporation/Group — of which TAC Capital is a subsidiary — and William Dusek, senior vice president of corporate development with The Adams Corporation.
Bravo Brio, which owns the Bravo Cucina Italiana and Brio Tuscan Grille chains, has struggled recently with declining sales and profits. The company recorded a $1.8 million operating loss for the first nine months of 2016 through Sept. 25, while revenue fell 2.6 percent, to $308.6 million.
Bravo reported a same-store sales decline of 8 percent in the third quarter, or a decline of 11.1 percent on a two-year, stacked basis. Meanwhile, Brio’s same-store sales fell 3.7 percent, or a 7.5-percent decline over two years.
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