NEW YORK — Wendy’s/Arby’s Group Inc. is exploring strategic alternatives for its Arby’s chain, known for roast-beef sandwiches and curly fries, as the company faces pressure to grow internationally and manage rising commodity costs.
The move to potentially sell Arby’s is seen as a concession by Wendy’s/Arby’s chairman Nelson Peltz that the operation is struggling to compete in an industry where growth is driven by stealing market share from rivals or expanding overseas, The Wall Street Journal reported earlier. Peltz is also head of hedge fund Trian Fund Management LP, which owns a 24.3 percent stake in the fast-food holding company.
“We believe the way to maximize shareholder value is to focus all of our management and financial resources on continuing to build the Wendy’s brand,” Peltz said in a statement. “Despite Arby’s positive momentum, the reality is that the Wendy’s brand, given its relative size and scope, is the key driver of shareholder return.”
Wendy’s/Arby’s isn’t the only fast-food company looking to reposition itself. Yum Brands Inc. said Tuesday it is looking to sell its Long John Silver’s and A&W All-American Food Restaurants chains to focus on the international growth of its larger brands, Taco Bell, KFC and Pizza Hut.
John Glass, a restaurant analyst at Morgan Stanley, calls Arby’s a “chronic underperformer” that is “both a distraction for management and a deterrent to potential shareholders.”
Dow Jones Newswires
