Chico’s FAS Inc. has filed its definitive proxy materials and is urging its shareholders to vote for its slate of board nominees.
The women’s specialty retailer is in the middle of a proxy fight with activist investor Barington Capital Group. In the letter to its shareholders, Chico’s said under the direction of new chief executive officer Shelley Broader, the company is “executing a new strategic plan built around four focus areas that we believe will usher in a new era of profitable growth and value creation for Chico’s FAS shareholders. We are making measurable progress on this plan — with more to come.” The four areas involve evolving the customer experience, strengthening the position of each brand, leveraging data to develop algorithms for real-time decision-making and improving the financials through cost-cutting and optimization of free cash flow.
The letter also noted that Broader has begun to build out her management team with new hires. The letter said, “As we look ahead, we intend to direct capital to further fortify our brands and drive profitable growth.” The company noted that continued capital returns to shareholders through quarterly dividends and its share repurchase program will remain a priority — it said that since 2010, more than $1.1 billion, or 131 percent of free cash flow, has been returned to shareholders.
Two of Chico’s board members, current directors David Dyer and Verna Gibson, will retire when their current terms expire on July 21, the day of the annual meeting. The board will continue to consist of nine members, including eight independent directors and the company’s chief executive officer.
Chico’s nominated Bonnie Brooks, vice chairman of Hudson’s Bay Co., and Bill Simon, former president and ceo of Wal-Mart U.S., to stand for election. Also on the slate are Broader and Janice Fields, an independent director on Chico’s board and former president of McDonald’s USA LLC.
Barington has submitted two nominees to Chico’s board: Barington’s ceo James A. Mitarotonda and former Macy’s vice chairman Janet E. Grove. The proxy fight is unusual in that Barington seems to want just a seat at the table so its “voice” can be heard. It’s not pushing for a management change, nor is it seeking a sale of the company. The investment firm believes it has ideas on how to improve operations that could boost the stock price to the $26-a-share range over a three-year period. At the close of trading Monday, shares of Chico’s were up 0.06 percent to $11.38.