Activist fund Barington pushes for change at Chico’s, again

Stock Markets29 minutes ago (Jun 07, 2021 09:40AM ET)

(C) Reuters.

By Svea Herbst-Bayliss

BOSTON (Reuters) – Activist investor Barington Capital Group on Monday urged Chico’s FAS (NYSE:CHS) to explore strategic options for its brands and said the apparel chain’s board should add new members to help improve its lagging stock price.

The New York-based hedge fund, which first pushed for changes at the clothing company five years ago, said it wants to see directors with experience in digital commerce, merchandising and marketing and women’s fashion specialty retail.

“We believe the Board has been highly deficient in these two areas for years,” Barington’s founder, James Mitarotonda, wrote in a letter to the board which was made public on Monday.

“The Chico’s Board is largely responsible for this underperformance,” he said about the company’s share price, stressing that “change is needed at the Chico’s Board.”

The hedge fund, which said it owns roughly 2% of the shares, is urging directors John Mahoney, David Walker and Stephen Watson to step down, criticizing them for a lack of relevant expertise and for having endorsed a former chief executive’s “failed strategic plan.”

Mitarotonda also expressed concern about board member Kevin Mansell, citing his close ties to Watson when both men were involved at retailer Kohl’s (NYSE:KSS).

The company is expected to hold an annual meeting on June 24. A Chico’s representative was not immediately available for comment.

While Mitarotonda praised Molly Langenstein, who was named chief executive last year, he said he wants the board to look at strategic alternatives, “that will unlock the tremendous value we see in the Soma brand in light of the pace of recovery at the Chico’s and WHBM (White House Black Market) brands.”

Chico’s stock price closed at $5.38 on Friday and has surged 238% since January. The last time Mitarotonda was involved, he forecast that with changes, the stock price could trade closer to $27 a share.

Activist fund Barington pushes for change at Chico’s, again

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Stories


Fraud protection startup nSure AI raises $6.8M in seed...

Fraud protection startup nSure AI has raised $6.8 million in seed funding, led by DisruptiveAI,...

Commsor buys Meetsy to build community tools for all

Mac Reddin, the co-founder and CEO of Commsor, met the first professional investor for...

How one founder is bringing the global corporate security...

When Cory Siskind finished school, she was dropped into a high-stakes job helping large...

Popular Categories