Citi Trends looks to have gotten an activist investor on its board.
A preliminary tally of shareholder votes from the off-price retailer’s annual meeting shows Macellum Capital Management chief executive officer Jonathan Duskin was voted onto Citi’s board, little more than two months after the hedge fund put four candidates forward.
Duskin’s appointment takes the spot of Lawrence Hyatt, formerly ceo of the Cracker Barrel restaurant chain, who served on Citi’s board since 2006.
While Citi did not comment on Duskin’s appointment, it said it was “extremely grateful” for Hyatt’s time on the board and said he “played a significant role” in the company’s success.
Other members of the company’s board were reelected, including Barbara Levy an adviser with Ideeli Inc. and a former merchandising executive with retailers including Macy’s and Ross, and R. Edward Anderson, Citi’s chairman and its former ceo.
Citi said final voting results will be sent to the Securities and Exchange Commission once certified by independent election inspector, IVS Associates Inc.
The hedge fund could not be immediately reached for comment.
When Duskin began pushing for new board members in early March, he said in a letter to shareholders that Citi’s board governance was at the heart of the company’s “prolonged” underperformance and that improved oversight could see its stock double.
That promise hadn’t come true as of Wednesday, but shares did rise 1.8 percent to $18.79. The high over the last year is $21.87.
The Atlanta-based retailer pushed back on Macellum’s arguments, telling shareholders in April that it had carried out a “successful turnaround against the backdrop of a challenging retail environment” and was moving forward with other initiatives to drive sustained growth and profitability.
Citi noted that it had tried to negotiate with Macellum, which it said only started acquiring stock in November, including being open to an additional independent director not affiliated with the hedge fund, but the offer was rejected.
The retailer also said at the time that Macellum’s proposed strategy of revamping board oversight “indicates an unsophisticated understanding of our business.”
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