Activist investors trying to boost Charming Shoppes Inc.’s bottom line ratcheted up the rhetoric Monday in an open letter to stockholders.
This story first appeared in the April 8, 2008 issue of WWD. Subscribe Today.
“While shareholders have suffered because of management’s missteps, this current board has awarded the top-five listed senior executives approximately $53.2 million in compensation over the last four fiscal years,” said the letter from the Charming Shoppes Full Value Committee, a group of investors led by hedge funds Crescendo Partners and Myca Partners.
The investors are trying to elect Arnaud Ajdler, Robert Frankfurt and Michael Appel to Charming Shoppes’ board at the company’s annual meeting in May.
“Our nominees, if elected, will work with the board to re-evaluate senior management’s plan,” said the letter.
If named to the board, the nominees intend to push for merchandise tweaks to boost the chain’s appeal to its main customers, the possible sale of noncore assets and a share buyback.
Charming Shoppes, in a statement to WWD, said the hedge funds are looking for short-term gains for themselves.
“We believe their nominees, if elected, would cause significant disruption and undermine Charming Shoppes’ ability to continue executing its strategic plan, while seeking to advance their own self-serving, short-term agenda,” the company said.
Charming Shoppes is contesting the group’s move to appoint new directors in a lawsuit that alleges they want to influence board decisions in their favor.
The retailer is already in the midst of a major restructuring. Charming Shoppes closed 150 stores last year, cut 150 management positions, repurchased $253 million of its own shares and relocated Catherines Plus Sizes’ home office to Bensalem, Pa., from Memphis.