by John Henry
Posted 3/19/2008 10:53 am
Updated 12 months ago
Barington Capital Group LP of New York, which has been trying with no luck to influence executives at Dillard's Inc., 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."
Barington represents a group of investors that includes Clinton Group Inc. and certain of its affiliates, which collectively beneficially owns about 5.6 percent of the outstanding Class A common stock of Dillard's.
The Barington nominees are:
● Mitarotonda, 53.
● Charles M. Elson, 48, described as an expert in the area of corporate governance.
● Nick White, 63, described as having more than 30 years experience in the retail industry, including Wal-Mart Stores Inc.
● Eric S. Salus, 54, described as having more than 25 years of experience in the retail industry, including Federated Department Stores and Macy's Home Store.
According to a news release of Barington's filing with the Securities & Exchange Commission, Dillard's stock price has fallen by about 54 percent from June 30, 2007, through the close of trading on March 18, erasing more than $1.6 billion in shareholder value.
In addition, Dillard's same-store sales growth rate has lagged its peer group by an average of nearly 400 basis points a year over the past five years and the company has not posted an increase in annual same-store sales since 1999.
Barington also said Dillard's has the third worst corporate governance profile of all the companies in the Standard & Poor's 500 Index, as measured by Institutional Shareholder Services.
The Barington Group said it thinks if Dillard's was more effectively managed it would be worth substantially more than its current stock price.
Barington said the four nominees, if elected, intend to work with the other members of the Dillard's board (who are elected by members of the Dillard family by virtue of their control of the company's Class B common stock) to improve operations, profitability, corporate governance and share price performance.
More On the Barington-Dillard's Relationship
Barington Capital's Moves on Dillard's Hint at Coming Proxy Fight