The Children’s Place has rejected the three board nominees put forth by two activist investors.
This story first appeared in the April 14, 2015 issue of WWD. Subscribe Today.
Norman Matthews, chairman, said, “We appreciate constructive input from our shareholders and are always open to listen to ideas to improve the company. However, we believe that Barington and Macellum’s views on the company’s leadership and performance are simply incorrect.”
Barington Capital and Macellum Advisors last month sent a letter to the retailer agitating for change. The two hedge funds together beneficially own 1.7 percent of the outstanding common stock of the company. They sent a letter urging the retailer to make changes, including, but not necessarily limited to, the possibility of a sale. They noted their lack of confidence in the current management team. They also are pushing for new independent directors to provide a fresh perspective in evaluating its performance.
In a proxy statement, or Schedule 14A, filed with the Securities and Exchange Commission Monday by the retailer, the activists plan to nominate Janet E. Grove, Seth Johnson and Robert L. Mettler to the board. The filing also said that in a separate conversation last month with Joseph Gromek, an investor in a separate vehicle sponsored by James Mitarotonda, Barington’s chairman and chief executive officer, he indicated he didn’t plan on launching an activist campaign. How all this will unfold is unclear. The proposed Barington slate was delivered to the retailer’s board on Friday.
Matthews, Kenneth Reiss and Stanley Reynolds — the latter two are on the audit committee — are standing for re-election to the board at the company’s annual meeting scheduled for May 22.
The company said the board “has evaluated” the nominees put forth by the hedge funds and “concluded that the company’s three nominees and the other members of the board have the right combination of expertise, experience and independence.” The retailer recommended election of its nominees and a rejection of the proposed slate by the activists.
Children’s Place said “stockholders do not need to take any action at this time.”
Barington Capital declined comment.