Applebee's Woes Leads to Boardroom Battle

OVERLAND PARK, KS-Frustration over lingering difficulties for the country’s largest casual dining chain has boiled over into the boardroom after a major shareholder proposed a slate of four directors to sit on the 12-member group. Fund manager Breeden Capital Management LLC filed SEC documents on Thursday nominating the quartet, a step CEO Richard Breeden attributed to “Applebee’s period of deteriorating operating performance,” a decline he charged is now entering its fourth year.

“Our nominees will provide fresh thinking, and they are completely independent from the mistakes of the past,” says Breeden. “With changes in both personnel and policies, we believe that Applebee’s can be a competitive success, not a study in stagnation.” Connecticut-based BCM owns 4.02 million shares of Applebee’s stock, or 5.42% of the total outstanding shares.

After a disappointing fourth quarter of 2006, Applebee’s announced this month that it would shutter 24 of its 1,940 stores after company officials hunkered down in February to consider ways for ending the weak stretch. According to some observers, the firm has been hurt for much of the decade by changes in dining trends. One analyst told GSR in a recent article that the company was squeezed at both ends of the market given its traditional presence as a middle-level eatery.