Proxy advisory firm Institutional Shareholder Services has partially sided with the activist firms in The Children’s Place battle for board seats.
ISS has recommended that shareholders vote in favor of Robert L. Mettler, but not Seth Johnson. Both are candidates nominated by Barington Capital Group and Macellum Advisors, the activist investors that are locked in a proxy battle with The Children’s Place for board seats at the upcoming May 22 annual shareholders’ meeting.
There are three board seats up for election. All three incumbent directors are seeking reelection: chairman Norman Matthews, Kenneth Reiss and Stanley Reynolds.
On Monday, the retailer, which is asking shareholders to vote for its entire slate of nominees, said, “We strongly disagree with ISS’ analysis and its partial support for Macellum and Barington. We believe that the campaign by Macellum and Barington against our ongoing transformation plan is not in the best interest of all shareholders and risks disrupting the substantial progress we’ve made under the current Board and management team.”
The company went on to note that the “dissidents’ nominees would not be additive to our board and would replace strong directors who have the relevant financial, operational and international experience and skills necessary for a global, omnichannel and specialty apparel retailer.”
The Children’s Place last week pre-announced first-quarter results as a move to drum up support for its slate of nominees. The chain said it expects first-quarter adjusted earnings per share in the range of 81 cents to 83 cents, compared with a guidance range of 60 cents to 65 cents. In comparison, adjusted EPS in the first quarter of 2014 was 68 cents.
The proxy battle between the two began in March when the activists sent a letter to the retailer’s board agitating for change. About a month later, the retailer responded and said it was rejecting the proposed nominees by the activists. Since then, each side has filed its own proxy statements urging shareholders to vote a particular slate, as well as corresponding investor presentations highlighting what’s right or what’s wrong at The Children’s Place.
The Children’s Place will officially release first-quarter results on Thursday.