Another day, another flurry of letters, but this time The Children’s Place went hostile.
In what has turned into a recurring event in the proxy fight for board seats at The Children’s Place, both the investor group and the retailer have again sought shareholder support for their respective slate of board nominees.
Barington Capital Group and Macellum Capital Management on Tuesday filed a Form DFAN14A with the Securities and Exchange Commission highlighting the conclusions of the Institutional Shareholder Services in recommending that their nominee Robert L. Mettler be nominated to The Children’s Place board at the shareholders’ annual meeting on May 22. The activist group also noted ISS’ nod to its point that The Children’s Place has “underperformed its only publicly traded peer, Carter’s, as well as the S&P retail and specialty retail indexes,” and urged shareholders to vote for its “Blue” proxy card. The activists also pointed to the ISS conclusion that the preliminary announcement of first-quarter results, although strong, “would have been more unequivocally compelling had they come earlier than five years into the ‘turnaround’ the company touts.”
In response, The Children’s Place sent another letter to shareholders, also Tuesday, highlighting yet again the retailer’s “recently announced excellent first-quarter financial results” as it asked shareholders to vote for the “White” proxy card.
But this time the letter from board chairman Norman Matthews went hostile, going personal in the attack noting: 1) The dissidents’ claims are not supported by the facts and 2) The dissidents’ erratic behavior and poor track record do not warrant shareholder support.
In addition to describing the activists’ campaign as “disruptive,” Matthews also called their attacks on the retailer’s board’s corporate governance position “ridiculous and unfounded.” And Matthews got personal, calling into question the professional affiliations of Jonathan Duskin, Macellum’s chief executive officer, stating that they “have been fraught with underperformance and abject failures,” as well as questioning whether Duskin could claim “to be a retail expert” given that “he has failed to help retail businesses succeed in this space.”
Duskin could not be reached for comment.
The retailer will officially re-release first-quarter results on Thursday, as well as hold a conference call with Wall Street analysts in the morning.