Prentice Capital Management is not letting up on Brisbane, Calif.-based retailer Bebe Stores Inc.
The Connecticut-based investment firm, founded by Michael Zimmerman, earlier this month expressed concern and “extreme dissatisfaction” with the Bebe board in addition to trouble getting in touch with company executives.
Officials at Prentice, which has a 5.55 percent stake in Bebe, appear to have finally gotten a hold of Bebe executives, according to a new letter from Prentice, filed today with the Securities and Exchange Commission. The letter to the board reiterates concerns held during a call made with newly appointed ceo Manny Mashouf and president and chief operating officer Walter Parks last week.
Mashouf, the company’s largest shareholder, last month returned to the company as part of a reorganization that also ushered in the return of Parks as former ceo Jim Wiggett and chief financial officer Liyuan Woo exited.
Today’s letter asked the board “approach the company’s ‘freefall’ collapse with a sense of extreme urgency” pointing out that a recently approved compensation package for Mashouf was cause for concern. It was disclosed in an SEC filing last week that Mashouf would receive base pay of $850,000 along with $8,000 a month for housing.
“We are extremely concerned that the board and Mr. Mashouf are neither cognizant of nor properly discharging their fiduciary duties to the company’s minority shareholders,” the letter said.
It concluded by asking the board to explore all strategy options for the business including a merger or potential sale of Bebe pointing out there are “interested and credible strategic and financial transaction candidates” interested in talking to the company.
A call to Bebe was not immediately returned.
Bebe shares closed today roughly flat to a market value of about $50 million.