The vicious volleying between Pacific Sunwear of California Inc. and Adrenalina resumed Tuesday, and even intensified, as PacSun backed its chief executive and questioned the wisdom of its suitor’s desire for a proxy fight and even its ability to make an acquisition.
PacSun said a merger between the two retailers was not in its shareholders’ best interest, and that Adrenalina’s threat of a proxy fight was “unfortunate.”
The letter, signed by Peter Starrett, PacSun’s lead director, came five days after Adrenalina ceo Ilia Lekach disclosed his intention to nominate four directors to the firm’s board. Lekach had sharply criticized PacSun’s leadership, calling for the resignation of ceo Sally Frame Kasaks, and saying her stewardship not only “threatened to destroy shareholder value,” but imperiled the very existence of the retailer.
Adrenalina, which operates three stores in Florida and owns about 3.2 percent of PacSun, has been in pursuit of its far larger Anaheim, Calif.-based rival since last fall. Adrenalina’s initial bid to acquire the 932-store operation for about $300 million was rejected in October and followed by a similarly rebuffed $329 million offer.
Starrett, who detailed PacSun’s recent turnaround efforts, said Adrenalina’s “platform” for enhancing shareholder value “centers on a merger” of the two retailers.
Starrett pointed to Adrenalina’s “substantial operating losses,” which totaled $5.8 million in 2007, and $6.2 million for the first nine months of this year. The retailer’s independent auditors, he noted, have “raised questions” about its ability to continue as a “going concern.”
The chairman continued, “We also strongly dispute your public contentions that your unspecified ‘plan’ has the support of either our largest shareholders or ‘pillars’ of the surf or skate apparel industry.”
He noted that shareholders wouldn’t be served by a proxy fight “in furtherance of your stated desire…to combine PacSun and Adrenalina and install yourself as ceo. But make no mistake — if that is the course you wish to pursue, we will do all that is necessary to protect shareholders.”
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
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For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
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Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews