Buffalo Wild Wings

Buffalo Wild Wings said Friday that Chief Executive Officer Sally Smith, who built the company into a restaurant giant, will retire by the end of the year as an activist investor won three seats on its board.

Shareholders at Buffalo Wild Wings’ annual meeting elected three of Marcato Capital Management’s four candidates for the board, apparently triggering a new direction for the company, which Smith had led for 21 years.

As Reuters reports, Smith had spent the past year trying to fend off Marcato’s demands for change. Among the new directors will be Marcato principal Mick McGuire, who has been pushing Buffalo Wild Wings to franchise 90% of its more than 1,200 restaurants — up from the current 50-50 ratio — and to accelerate its international and tech expansion.

“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,” Chairman Jerry R. Rose said in announcing Smith’s retirement. “Under her guidance and stewardship, Buffalo Wild Wings has transformed into an industry leader.”

Smith said she would assist in the company’s transition to a new CEO and was “confident that the company, including its excellent management and board, are solidly positioned for its next phase of growth and development.”

Smith oversaw the growth of Buffalo Wild Wings from $55 million to about $2 billion in annual sales. The company’s shares surged 15-fold after it went public in 2003, but new restaurant openings and revenue growth slowed in the past two years.

At the annual meeting, McGuire said the company’s share value, which is now about 20% below its 2015 peak, is “unsustainable” and that executives had no time to lose in fixing things. He was pleased, he said, that other 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.”

The Minneapolis Star Tribune noted that with Smith departing and McGuire’s slate elected, the board will have only two members who have served on it more than a year.

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