The industry expert spent more than 15 years combined working for LongHorn Steakhouse and Olive Garden.
Activist investor Starboard Value, known for leading turnaround efforts in the restaurant segment, emphasized its desire to fix Bloomin' Brands by adding a restaurant consultant connected to Darden's comeback about a decade ago.
The company reported in an SEC filing that it hired industry veteran Dave George as an advisor in connection with its recent investment in Bloomin', the parent of Outback Steakhouse, Carrabba's, Bonefish Grill, and Fleming's Prime Steakhouse & Wine Bar. Starboard said it made the move after "after discussions with Mr. George and in view of Mr. George’s unique skill set, broad restaurant industry experience and extensive restaurant industry knowledge."
George worked at Darden for nearly 17 years, serving as COO from January 2018 to August 2020. Prior to that, he worked as president of Longhorn Steakhouse for 10 years and as president of Olive Garden for five years.
He was leading Olive Garden when Starboard—dissatisfied with Darden's trajectory—managed to replace its entire board of directors in 2014. While Starboard proposed that Red Lobster and Olive Garden should be under distinct entities, Darden rejected this idea and instead sold Red Lobster to Golden Gate Capital for $2.1 billion. Before the board's overhaul, Starboard unveiled a detailed plan to enhance Darden's financial results, which highlighted areas for improvement like Olive Garden's endless breadstick offer and cooking methods. This change in management ushered in a sustained period of increased sales for Darden.
The addition comes almost a month after Starboard revealed it took a 9.9 percent stake in Bloomin'. The Wall Street Journal reported the move makes Starboard one of the public company's top five investors. Not too long after Starboard unveiled its investment, Bloomin' named R. Michael Mohan—who previously served as president and COO of Best Buy—chairman after serving on the board since 2017. He succeeded Jim Craigie, who retired after 10 years of service. The company's board also added Rohit Lal, executive vice president and CIO of trucking company Saia. When announcing the changes, Bloomin' praised both men's expertise in digital operations.
Bloomin's U.S. same-store sales rose slightly at 0.8 percent in the second quarter. Traffic declined 4.2 percent, but CEO David Deno said this was in line with expectations. He added that the company's traffic outperformed the industry by 110 basis points.
For Outback, there was a 0.6 percent rise in domestic same-store sales during the second quarter, but it saw a 5.4 percent decline in traffic compared to the previous year. Thanks to the introduction of new cooking equipment and handheld devices for staff, the restaurant's operating margin grew to 16.6 percent in the same quarter. This advanced cooking equipment is set to be fully implemented by the third quarter. Additionally, the casual-dining brand is progressing with a more compact, 5,000-square-foot model that both reduces expenses and boosts efficiency.
Outback ended Q2 with 689 stores, followed by Carrabba's (218), Bonefish Grill (175), and Fleming's (64).
In addition to Darden, Starboard played a pivotal role in steering Papa Johns toward stability. In early 2019, after injecting $250 million into the pizza chain, it appointed CEO Jeffrey Smith as the new chairman of the brand. This intervention came after a tumultuous period for Papa Johns, marked by the resignation of founder and ex-CEO/chairman John Schnatter, following his use of a racial slur during a conference call. Since Starboard stepped in, the company's stock value and operating income have both more than doubled, with same-store sales skyrocketing during the pandemic. Moreover, in 2022, Papa Johns earned spots on Forbes' World’s Best Employers and Best Employers for Diversity lists, and for the second consecutive year, secured a perfect score on the Human Rights Campaign Foundation’s Corporate Equality Index.