UPDATED: Dillard's Restates Earnings Due to 'Error' in CDI Accounting

by Gwen Moritz  on Thursday, Mar. 20, 2008 11:26 am  

Dillard's on Thursday restated past earnings, citing an "error" in accounting at CDI Contractors, the construction firm it partly owns. CEO William Dillard II is seen here.

"We simply did not achieve the level of sales necessary to produce more acceptable results. Moving forward, we will execute further improvements to our merchandise mix while working to effectively respond to potentially challenging macro-economic conditions," Dillard said. "We remain committed to strengthening our appeal to aspirational and contemporary shoppers to set Dillard's apart in the marketplace."

Proxy Fight

The earnings report comes a day after Barington Capital Group LP of New York, which has been trying with no luck to influence executives at Dillard's, said it plans to nominate four people for election to the 12-member board of directors at the company's annual stockholders meeting on May 17.

James A. Mitarotonda, Barington's chairman, president and chief executive officer, has said on numerous occasions he believes Dillard's vast value potential is not being realized and that he lacks confidence in the ability of Dillard's current board, which is composed of directors with an average tenure of almost 20 years, to improve shareholder value.

Dillard's, for the first time on Wednesday, referred questions about the communication from Barington to the New York office of Brunswick Group, an international corporate communications firm. Shortly after noon, Dillard's issued a statement confirming that it had received Barington's notice of intent to nominate directors and that the notice "will be forwarded to the Executive Committee of the Company's Board of Directors for review."

Also Thursday, another investor group disclosed its holdings in Dillard's, and said it wanted to work with the retailer to improve Dillard's governance and management.

The Associated Press reported that Southeastern Asset Management reported owning a 12.9 percent stake in Dillard's. The company said it has held discussions with Dillard's management and other third parties, including another shareholder, about opportunities to increase shareholder value.



Please read our comments policy before commenting.