Chico’s Revamps Board as Activist Investor Starts Proxy Fightby
Chico’s FAS Inc., trying to repel a proxy fight led by an activist investor, is reshuffling its board in a bid to show that the apparel chain is on the right track.
The company will nominate retail veteran Bonnie Brooks and former Wal-Mart Stores Inc. executive Bill Simon to the board as new independent directors, according to a statement on Tuesday. They will replace David Dyer and Verna Gibson, who are stepping down from the board this year.
The announcement follows a move by shareholder Barington Capital Group to get its own slate nominated to the board. Chico’s said it reviewed five candidates proposed by Barington, but decided unanimously that Brooks and Simon had “the most current and relevant skill set.” Barington is now taking the matter directly to investors. It will seek to have two directors -- its chief executive officer, James Mitarotonda, and the former Macy’s Inc. executive Janet Grove -- elected at Chico’s shareholder meeting in July.
Barington, which has been meeting with Chico’s management since March, is lobbying for the company to cut overhead and advertising costs.
“Barington believes that more significant reductions in marketing expenses are needed and can be accomplished while still growing sales,” the investment firm said in a separate statement on Tuesday.