NEW YORK, July 15, 2016 /PRNewswire/ -- The Barington
Group, which collectively beneficially owns more than 1.6% of the
outstanding shares of common stock of Chico's FAS, Inc. (NYSE: CHS)
("Chico's" or the "Company"), announced today that it has
terminated its campaign to elect two independent,
stockholder-focused representatives to the Board of Directors of
Chico's at the Company's 2016 Annual Meeting of Stockholders and
will be withdrawing its director nominations. The Barington
Group encourages stockholders who have already submitted a blue
proxy card to revote their shares on the Company's white proxy
card.
Over the past two months, Chico's has repeatedly stated that
positive changes are underway at the Company. Chico's has
claimed that it is on the right path to profitable growth and value
creation and has promised stockholders that:
"Our new Chief Executive Officer and President, Shelley Broader, and her management team have
been successfully executing on a new strategic plan that we believe
will enable us to fully capitalize on the Company's many strengths,
enhance shareholder value and drive profitable growth."
Chico's has vociferously argued that Ms. Broader should be given
the opportunity to continue the progress she has begun, and the two
largest proxy advisory firms – Institutional Shareholder Services
and Glass Lewis – agree. As noted by Glass Lewis, "[D]espite
the Company's long-term stock price underperformance and
disappointing historical financial results… at this very early
stage, we're inclined to recommend that shareholders allow more
time for the new CEO and new operating plan to potentially deliver
improved results…."
While we are convinced that our highly-qualified candidates
would have had a significant and immediate positive impact on the
Board, in deference to the views of ISS and Glass Lewis, the
Barington Group has decided to terminate its proxy campaign.
It is now up to Ms. Broader to deliver on her promises to
stockholders. The Company has repeatedly stated that Chico's
has an industry leading portfolio of brands that provides a strong
platform for profitable growth and value creation. We
strongly agree and expect Ms. Broader to fulfill her commitment to
stockholders to enhance shareholder value.
James A. Mitarotonda, the
Chairman and Chief Executive Officer of Barington Capital Group,
L.P. stated, "For the past several months, we have worked
tirelessly to ensure that positive changes are made at
Chico's. We are proud to have served as a catalyst for a
number of improvements that the Company has recently announced.
Our efforts have undoubtedly increased the pressure on the
Board and management to address the issues we have raised and to
deliver actual results to stockholders. We are deeply
committed to our investment in Chico's and ensuring that the
Company maximizes its long-term value potential and is run in the
best interests of stockholders. We will be monitoring the
Company closely."
Since Barington began its dialogue with the Company, Chico's has
announced $65-$85 million in planned
cost reductions, two long-tenured directors are being replaced,
Chico's has commenced the process of declassifying its Board (which
has been classified since the Company's IPO in 1993), and
Bonnie Brooks is retiring from her
position at Hudson's Bay Company
which helps address a serious conflict of interest that Barington
identified.
The Barington Group is greatly appreciative of the supportive
statements it has received from its fellow stockholders over the
past few months. We also appreciate the endorsement we have
received from the proxy advisory firm Egan-Jones, which has stated
that it believes voting for the Barington Group's two nominees is
in the best interest of the Company and its shareholders. In
support of its recommendation of the Barington Group's two
experienced nominees, Egan-Jones cited Barington's track record in
working with underperforming companies to help improve their
long-term financial performance, as well as its belief that the
Barington Group's nominees would work to the benefit of the
shareholders given their fresh ideas and perspective, industry
expertise and public company experience.
It is Barington's desire to continue to have an open dialogue
with Ms. Broader regarding opportunities to improve long-term
shareholder value, and we hope that she and the Board will
carefully consider the measures we have suggested, including:
- measures to decentralize the Company's large corporate
infrastructure which we believe is hindering the ability of Chico's
three brands to move quickly and be responsive to customer
demands;
- initiatives to enhance revenue by improving execution and
merchandising at each of the Company's three brands and
accelerating the growth of Soma;
- measures to decrease the Company's high SG&A expenses;
and
- our suggestions to improve the Company's executive compensation
practices, which have received an "F" grade by Glass
Lewis.
The Barington Group Urges Stockholders to Vote Against
Proposal 3 – The Advisory Vote on Executive Compensation – By
Checking the "Against" Box on the Company's White Proxy
Card
Finally, with respect to the Company's executive compensation
practices, we note that Glass Lewis has given Chico's an "F"
grade in the area of pay for performance and has stated, "We
believe that shareholders should have serious reservations with the
Company's compensation policies and practices." We, like
Glass Lewis, believe that the Chico's Board can do a better job of
aligning management and shareholder interests through the Company's
executive compensation practices. We therefore agree with
Glass Lewis that stockholders should vote against Proposal 3 – the
advisory vote on executive compensation – by checking the "against"
box on the Company's white proxy card. It is our hope that an
"against" vote by stockholders will encourage the Board's
Compensation Committee to improve the Company's executive
compensation practices, particularly in the areas of concern cited
by both Glass Lewis and Barington.
About Barington Capital Group, L.P.:
Barington Capital Group, L.P. is a fundamental, value-oriented
activist investment firm that was established by James A. Mitarotonda in January 2000.
Barington invests in undervalued publicly traded companies that
Barington believes can appreciate significantly in value as a
result of a change in corporate strategy or improvements in
operations, capital allocation or corporate governance.
Barington's investment team, advisors and network of industry
experts draw upon their extensive strategic, operating and
boardroom experience to assist companies in designing and
implementing initiatives to improve long-term shareholder
value. Barington has substantial experience investing in
retail and apparel companies, with prior investments in companies
such as Dillard's, The Children's Place, The Jones Group, Warnaco,
Nautica, Steve Madden, Payless
ShoeSource and Stride Rite. Each of these companies has shown
a meaningful improvement in shareholder value following Barington's
involvement.
Important Information:
The Barington Group has filed a definitive proxy statement and
an accompanying BLUE proxy card with the Securities and Exchange
Commission on June 13, 2016 to be
used to solicit proxies in connection with the election of its two
director nominees at the upcoming 2016 Annual Meeting of
Stockholders ("Annual Meeting") of Chico's FAS, Inc., a
Florida corporation.
THE BARINGTON GROUP HAS WITHDRAWN ITS SLATE OF NOMINEES FOR
ELECTION TO THE BOARD OF DIRECTORS OF THE COMPANY AT THE ANNUAL
MEETING. BARINGTON ENCOURAGES ANY CHICO'S STOCKHOLDER WHO HAS
ALREADY SUBMITTED A BLUE PROXY CARD TO REVOTE THEIR SHARES ON THE
COMPANY'S WHITE PROXY CARD. PROXIES RECEIVED BY THE BARINGTON
GROUP THAT HAVE NOT BEEN REVOKED OR REVOTED BY THE STOCKHOLDERS
GIVING US SUCH PROXIES WILL BE VOTED AT THE ANNUAL MEETING IN
ACCORDANCE WITH THE INSTRUCTIONS PROVIDED TO US.
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SOURCE Barington Capital Group, L.P.