Barington blasts Outback’s bread basket

If Outback Steakhouse wants to turn around its business, it could start with some “warm, freshly baked bread.”

That’s according to activist investor James Mitarotonda of New York-based Barington Capital, who argued in a letter to Outback’s corporate parent, Bloomin’ Brands, that rival steak joint Texas Roadhouse does a better job of greeting patrons.

“When customers sit down at their table at Texas Roadhouse, a server immediately presents them with warm, freshly baked bread,” Mitarotonda wrote to Bloomin’ Chief Executive Elizabeth Smith.

“We believe this high level of service delights customers and also offers them immediate value,” he added.

Barington likewise argued that Bloomin’ should spin off its lesserknown restaurant chains — which include Bonefish Grill, Carrabba’s and Fleming’s — so that Outback can compete as a stand-alone company.

It’s not the first time activist investors have raised a beef over the bread situation at sit-down restaurants. In 2014, Jeff Smith of Starboard Value argued that Darden-owned Olive Garden’s overly generous unlimited breadstick policy resulted in too many cold, uneaten breadsticks at the table, which “both increased costs and hurt the guest experience.”

Barington’s Mitarotonda, also an investor in Darden in 2014, wrote he believes that Bloomin’ “has made some of the same mistakes that Darden’s prior management team made, and that they should follow some of the same steps that the new management of Darden has taken to improve performance.”

“Bloomin’ Brands welcomes open communications with shareholders and constructive input that may advance the … goal of enhancing value,” the company said in a statement.