CEO Profile: William T. Dillard II of Dillard's Inc.

by Mark Friedman  on Monday, Mar. 26, 2012 12:00 am  

Meanwhile, Dillard’s sales continued to fall.


Sales Fall

As the Great Recession took hold, the company seemed to be in a freefall. Sales in 2009 were just shy of $6.1 billion, off more than 15 percent from 2007’s total of $7.2 billion.

In 2008, activist shareholders blamed Dillard for the company’s decline. “The performance of the Company over the past ten years has been atrocious,” said James Mitarotonda, chairman and CEO of Barington Capital Group LP of New York, and George Hall, chairman and CEO of the Clinton Group Inc. of New York. The remarks came in a 2008 letter that attempted to persuade directors to replace the family as top executives.

The board, though, is controlled by the Dillard family under a dual-class stock arrangement. Class A stock is traded on the New York Stock Exchange, but holders of the Class B shares, owned almost exclusively by Dillard and his family members, have the right to choose eight of the 12 corporate directors.

Still, the public criticism might have had an impact. At Dillard’s May 2008 shareholders’ meeting, Dillard unveiled his plan to get the company back on track. He called for closing underperforming stores, slashing expenses and improving merchandise.

“I wish we would have saw this coming 18 months ago, instead of nine months ago,” Dillard said of the recession at the meeting in May 2008. “Fortunately, we have started this.”

But dark days for the company were still ahead.

In 2008, Dillard’s was named one of the worst-performing stocks on the S&P 500 in the last 10 years, according to a report by Schaeffer’s Investment Research.

The Dillard family “is overpaid and under-qualified for the positions they hold and can be readily replaced with more talented retailers,” Mitarotonda and Hall said in an Oct. 27, 2008, letter.




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