INDIANAPOLIS The Steak n Shake Co. said late Thursday that company chairman and well-known activist investor Sardar Biglari was named chief executive of the beleaguered operator-franchisor earlier this week after the resignation of interim CEO Wayne Kelley.
Steak n Shake, which operates or franchises about 490 namesake restaurants, said a search was under way for a chain president, or an executive “focused on restaurant operations.” The former interim president at Steak n Shake, Jeffrey Blade, resigned last month.
As CEO, Biglari said he would focus on “leading the organization principally from a strategic, financial and governance perspective.”
Kelley will retain his position on Steak n Shake’s board of directors.
“I am pleased to pass the chief executive officer position to Sardar, who has demonstrated an incredible work ethic and dedication to the company since his election to the board,” Kelley said in a statement. “As chairman, he has shown that he is willing and able to lead the company through its turnaround process, and I believe he is the right chief executive officer to lead Steak n Shake into the future.”
Biglari took the chairman post at Steak n Shake in June after building his investment in Steak n Shake to about 9 percent. He forced a proxy fight among shareholders for control of the board, and with his victory ousted then-chairman and interim CEO Alan Gilman, a 16-year Steak n Shake veteran. Biglari and his investment subsidiaries held a 13.1-percent stake in the restaurant company as of the latest filing in June.
Steak n Shake, a full-service hybrid between quick service and casual dining, has posted slumping sales and profit for years. Financial results for fiscal 2007 included a 58-percent drop in net income to $11.8 million, a 2.4-percent increase in revenues to $654 million and a same-store sales decrease of 3.8 percent.
In his statement Thursday, Biglari said the chain would close underperforming locations, reduce corporate spending and shorten hours of operation. Steak n Shake is well-known for staying open 24 hours a day or late into the evening at most locations. Additional details will be disclosed within 60 days, the company said. Third quarter earnings are expected on Monday.
Biglari, who heads investment firm The Lion Fund in San Antonio, also serves as chairman of Western Sizzlin Corp., another publicly held restaurant company.