Biglari Takes on More Responsibility
As we’ve known since the annual meeting of Western Sizzlin’, Biglari has been searching for a new CEO for Steak N Shake (SNS). It seems he has found one: himself.
Before we go nuts here, read this quote from the filing:
I would like to thank Wayne [Kelley, interim CEO] for his guidance over the last several months. In reviewing Steak n Shake and beginning to implement its restructuring, the Board and I concluded that to achieve the best results, we need an executive who will be focused on restaurant operations. As a consequence, we will seek a president with significant restaurant experience to concentrate on improving restaurant operations, whereas I will assume the CEO position, leading the organization principally from a strategic, financial, and governance perspective.
So, while the news is symbolically important, the practical difference between “Biglari, Chairman and CEO” and “Biglari, Chairman” seems very little. He’ll still not be running restaurant operations, and remains on the lookout for an operator. I’ve mentioned before that Sardar shouldn’t try to become an operational CEO. As a strategic leader with financial acumen, on the other hand, Biglari should excel.
This all stacks up to postive news with a little negative taint. The structure Biglari looks to build for SNS seems logical, and he is the person to be making broad strategic and financial decisions. However, this means no operator has been found during the intense search process currently in progress.
At the Western Sizzlin’ (WEST) annual meeting, Sardar spoke about the search. He alluded to the fact that SNS was very close to hiring a well-known CEO, presumed by the crowd to be Aylwin Lewis by his hints, but that it had fallen through.
I hope progress has been made since then, for obvious reasons. Shareholders can only take a “wait and hope” approach for now. In the meantime, Monday’s earnings release should give us a hint how horrendous the first quarter under Biglari was.
On a side note, Biglari dropped this nugget at the end of his comments:
“Details of our plan will be disclosed within the next 60 days in a shareholder letter.”
WTIS: We trust in Sardar. Smart? Only time will tell.
Check out the perspective from The Street Capitalist here.
Disclosure: Long SNS and WEST
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