Under the terms of the new “Support Agreement,” the retailer has agreed to nominate four new independent director candidates for election to the company’s board at its annual shareholders meeting scheduled for June 30. Three of the candidates are: Jonathan Duskin, chief executive officer of Macellum; Kent Kleeberger, an independent consultant to some private equity firms and former chief operating officer of Chico’s FAS Inc.; and Laura Weil, founder of consultancy firm Village Lane Advisory and former C-level executive at New York & Co., Ashley Stewart, Ann Taylor and American Eagle Outfitters Inc. A mutually agreed upon fourth candidate has yet to be selected.
Current board members Mark Cohn, Edwin Holman, Anne Jones, David Levin, Paul Snyder and Patricia Stensrud will not run for re-election. Incumbent directors who will stand for re-election are: Lisa Wardell, chairman; LuAnn Via, president and chief executive officer, and William Sharpe. Following the election, the number of board members will decrease to seven from nine.
Duskin said, “Macellum believes that adding multiple independent directors with specialty retail industry experience will help drive growth, enhance profitability and increase stockholder returns.”
In a telephone interview, Duskin said, “This was a really good process. We’ve been able to work collaboratively over the past year.” He said that he expects the fourth candidate to be selected in a few weeks, after the vetting process is completed.
As part of its agreement with the retailer, Macellum and certain affiliates have agreed to customary standstill and voting provisions through the 2016 annual meeting of stockholders.
Macellum, which owns 8.4 percent of the retailer’s outstanding shares, began pressing for change in March 2015. It wasn’t until June of that year that it was disclosed in a Securities and Exchange Commission filing that the retailer rebuffed Macellum’s request to “fortify the board.”
With the “Support Agreement” in place, those issues have been resolved.
Wardell said, “We are pleased to add additional strength and expertise to our board slate with the addition of new, independent director nominees, who will add valuable experience and fresh perspectives to the Christopher & Banks board.”
Via said the company is committed to the execution of its strategic plans, adding that it “looks forward to working collaboratively with our new directors.”
Investors liked the news, sending shares of Christopher & Banks up 41.3 percent to close at $2.67 in Big Board trading.
Separately, the company also said it posted a fourth-quarter loss for the period ended Jan. 30. The loss was $46.6 million, or $1.26 a diluted share, on revenues of $94.6 million. The loss included a $37.5 million valuation allowance for deferred tax assets.