Sally Smith will retire as CEO of Buffalo Wild Wings Inc. by the end of the year, the company said Friday.
The retirement will end a long tenure in which Smith turned a struggling restaurant with a quirky name and a little-known product into one of the nation’s largest and most consequential casual-dining chains.
Smith’s retirement came as Buffalo Wild Wings has struggled with weak results over the past two years, as well as a weakening stock price. That increased pressure from investors, and an activist shareholder pushed for changes at the company and urged Smith’s resignation.
The announcement came during Buffalo Wild Wings’ annual meeting in Minneapolis. The company said it has started a search to find Smith’s successor.
“Sally has delivered countless contributions to Buffalo Wild Wings for more than two decades, and much of our success to date is directly attributed to her leadership,” Buffalo Wild Wings chairman Jerry Rose said in a statement. “Under her guidance and stewardship, Buffalo Wild Wings transformed into an industry leader, and we look forward to continuing to work together to ensure a seamless transition of executive leadership.”
Buffalo Wild Wings’ investors voted to place three of activist investor Marcato Capital Management’s four nominees to the company’s board of directors, including former Pizza Hut CEO Scott Bergren, Marcato managing partner Mick McGuire, and CTI Foods CEO Sam Rovit. The company had endorsed Rovit's nomination.
The vote, and Smith’s retirement, could pave the way for major changes at the company. Marcato had called for Smith’s resignation, and also proposed that the company refranchise most of its more than 600 company-owned restaurants.
“We are very pleased that our fellow … shareholders recognize that additional change on the board is warranted to return Buffalo Wild Wings to a path of growth and long-term value creation,” McGuire said in a statement. “We will bring fresh perspective, restaurant industry expertise and oversight the [Buffalo Wild Wings] board needs to spearhead improvements at the company.”
Buffalo Wild Wings was a 35-unit chain known as Buffalo Wild Wings & Weck, or BW3, when Smith was named CFO in 1994. The company hired a new CEO two years later, but he didn’t show up for his first day on the job. Smith was given the role by default.
Smith turned that opportunity into a 20-year career that would make her one of the biggest names in the restaurant industry. She is widely credited for turning the chain around, simplifying its name and guiding its sports-bar focus.
Buffalo Wild Wings went public in 2003, and it has opened an average 51 locations a year for 22 straight years, giving Buffalo Wild Wings about 1,200 units across the country.
Same-store sales weakened in 2015, and fell through 2016. Activist investor Marcato, which now owns nearly 10 percent of the company’s stock, began agitating for change, including calling for Smith’s resignation.
Marcato had nominated four people to Buffalo Wild Wings’ board of directors. The results of the shareholder vote were uncertain as of early Friday afternoon, but Smith’s departure could be seen as a sign that Marcato won seats to the board.
Buffalo Wild Wings’ stock rose nearly 5 percent by early Friday afternoon.
Smith said she will “focus on leading Buffalo Wild Wings and driving value-creating change” until the transition.
“I am proud of Buffalo Wild Wings’ tremendous success,” Smith said in a statement. “We have made great strides in executing our strategic plan and continuing to innovate to stay ahead of the competition.”
Updated: June 2, 2017 This article has been updated with information about Buffalo Wild Wings' board nominees.
Contact Jonathan Maze at [email protected]
Follow him on Twitter: @jonathanmaze