UPDATE 2-Retailer Chico's squares off against activist Barington Capital
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By Michael Flaherty
NEW YORK May 24 (Reuters) - Chico's FAS Inc is headed for a proxy fight with shareholder Barington Capital, as the women's apparel retailer resists the activist hedge fund's push to put two nominees on the company's board.
Barington nominated its chairman and chief executive, James Mitarotonda, and industry veteran Janet Grove, who served as vice chairman of department store operator Macy's Inc from 2003 to 2011, the company said in a statement on Tuesday.
Chico's quickly followed by saying it would nominate Bonnie Brooks, vice chairman of Hudson's Bay Co, and Bill Simon, the former president and chief executive of Walmart U.S. , to run for election to its nine-member board. Two of Chico's existing directors will step down this year, the company said.
Chico's said members of its board reviewed Barington's nominees and spoke to them directly, but decided in the end that Brooks and Simon "have the most current and relevant skill sets and experience." Simon and Chico's CEO Shelley Broader both worked at Wal-Mart during the same period, starting in 2010.
Broader became CEO in December and soon launched a turnaround effort, which included plans to close 170-175 stores through 2017.
Despite the company's moves to refresh the board and reduce costs, Barington is pressing ahead with its proxy fight.
Barington, which owns 1.4 percent of the company, said that Chico's shares are down 77 percent from its all-time high in 2006 and that it has significantly underperformed its peers. The New York-based hedge fund also said its concerned about Chico's high headquarter and advertising expenses. Continued...