In a recent statement addressed to Chairman Gerald Deitchle, activist investor PW Partners Capital Management suggested key changes to enhance BJ’s Restaurants’ performance and value proposition.
Board Restructuring for Efficiency
PW Partners proposed a reduction in the size of the current board of directors from 11 members to seven. The aim is to streamline decision-making processes and improve operational efficiency within the organization.
Cost Reduction Initiatives
The investment group emphasized the importance of trimming costs in various areas such as labor, purchasing, and general administrative expenses. It is estimated that BJ’s Restaurants could save up to $50 million by implementing these measures by the end of the second quarter.
Focus on Shareholder Value
PW Partners recommended appointing its representatives to the board to actively contribute towards maximizing shareholder value. Additionally, it suggested a buyback of $100 million worth of company shares to demonstrate confidence in BJ’s Restaurants’ potential for growth.
Historical Success and Future Opportunities
Citing past achievements, PW Partners highlighted the significant stock price surge that occurred a decade ago when cost efficiencies were implemented. The investment group believes that there is still substantial room for margin expansion and stock price appreciation given the current market conditions.
Investing in Stock Repurchase
With BJ’s Restaurants’ stock trading at an attractive valuation, PW Partners urged the company to consider aggressively repurchasing its shares as a means of unlocking shareholder value.
PW Partners Capital Management currently holds approximately 4.9% of BJ’s outstanding shares.