Client terminates COO without cause: Time to say “Hi”?
Steve’s Breakdown: We may have been jumping the gun on Red Robin because it’s still hitting the fan over there.
Is it time to approach? Well, it’s never a bad time if you make a good impression and this account is going to move so it’s up to you.
Their last review was in 2016 before a lot of this mess got weird. BTW: We predicted that review too.
GREENWOOD VILLAGE, CO:
- Red Robin terminated Guy J. Constant’s employment as EVP and chief operating officer, according to an SEC filing.
- His termination was without cause.
- The company is starting an external search for a new COO. In the meantime, current SVP and chief people officer, Michael Buchmeier, will assume responsibilities as interim COO.
Constant, who joined the company as chief financial officer in 2016, replaced Carin Stutz in 2018 as COO when she was terminated without cause. At the time, the company was also focused on regaining its operational edge, improving wait times and table turns, and decreasing the number of people walking away without being seated. It has since implemented various technologies, such as rolling out handheld POS terminals during Q3 2019.
But even after a COO change, the restaurant still struggled with slumping same-store sales and faced growing opposition among its shareholders, including Vintage Capital’s takeover bid of $40 per share that the chain’s board unanimously rejected.
Red Robin shareholder Viex Capital Advisors suggested in December that the company needs a different direction, capitalization and board of directors — even though the company just refreshed its board — and criticized the company’s lack of a clear strategic plan after rejecting Vintage’s bid, according to Restaurant Business.
Given Red Robin’s ongoing struggles, which include a 2.2% decline in comparable revenue and 5.1% decline in guest counts during the first nine months of 2019, the question is whether a new COO will be able to fix things fast enough to quash investor anxiety.
Pass reporting on Red Robin