Fortress Dillard's: A Thorn in the Side of Investors, Analysts

by Gwen Moritz  on Monday, Oct. 1, 2007 12:00 am  

How long Mitarotonda and Barington will keep up the pressure remains to be seen; Mitarotonda declined an interview request last week. As an institutional investor, however, Barington tends toward long-term investments and activist involvement.

Barington's activism joins that of a coalition of long-term investors led by Christian Brothers Investment Services, which placed a nonbinding resolution on the ballot of the May 2007 shareholders meeting urging Dillard's to prepare a sustainability report on its environmental and social policies.

The resolution, unanimously opposed by the board of directors, failed - but not by much. More than three months after the meeting - a delay Tanner found curious - the result of the vote was included in the company's quarterly report: 46.36 percent of more than 51 million shares voted favored the resolution.

The coalition represented only about half a million shares.

Even if a majority of shareholders had favored the resolution, it was only advisory in nature. But Tanner said she was encouraged by the result.

"We're going to file again next year.... We're not going away," she said. "This resolution will remain on the ballot as long as we get 10 percent [of the vote]."

Other sponsors of the resolution were Connecticut Retirement Plans & Trust Funds, the New York City Pension Funds and Amalgamated Bank's LongView Collective Investment Funds.

Of course, Dillard's is free to prepare a report on corporate citizenship with or without shareholder approval.

"Hundreds of companies put out these kinds of reports without this kind of pressure," Tanner said. "Many companies that I work with that put these out have not done so due to shareholder resolutions."

And there was a time when she hoped Dillard's would be one of them.

"I've been working on Dillard's for the past five years and, as far as I know, that's when New York City [Pension Funds] also began working on it," Tanner said.

At one point, "things were going well. We were able to talk to the company and they were interested in working with us."



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