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Activist Dillard's shareholder to nominate 4 directors Thursday, Mar 20, 2008 By Jason Wiest Arkansas News Bureau LITTLE ROCK - An activist group of shareholders that for months has publicly challenged the management of Dillard's Inc. said Wednesday it would nominate four people for election to the company's 12-member board of directors. Barington Capital Group L.P, which represents a group of investors including the Clinton Group Inc., have criticized Dillard's since mid-2007, saying the retailer is not realizing its full potential. Dillard's shareholders will elect board members at its annual meeting May 17. The Barington group collectively beneficially owns about 5.6 percent of Dillard's outstanding Class A Common Stock, but the Dillard family owns a controlling interest in the company. The family owns most of the company's Class B stock, which allows members to elect eight of the board's 12 directors. "If elected, the Barington Group's nominees intend to work constructively with the other members of the Dillard's board to seek to improve the company's operations, profitability, corporate governance and share price performance," the group said in a prepared statement. It did not grant interviews Wednesday. The group's nominees include Barington Capital President and Chairman James Mitarotonda, who serves as a director of The Pep Boys; University of Delaware corporate governance professor Charles Elson, who serves as a director of AutoZone Inc.; former Wal-Mart and Sam's Club executive Nick White, who presides over a retail, supplier and private equity consulting firm he founded; and former Federated Department Stores executive Eric Salus, who presides over a consulting firm he founded that provides services to retailers. The Barington group has previously suggested ways to maximize shareholder value, including "initiatives that would augment the company's existing operating strategy in areas such as merchandising, inventory management and cost containment, as well as measures to unlock the value of the company's real estate portfolio." Dillard's same-store sales growth rate has lagged behind its peer group by an average of nearly 400 basis points per annum over the past five years, Barington said. The company's stock price has fallen more than 50 percent since June 30, 2007. Dillard's acknowledged receiving Barington's nomination proposal Wednesday, noting measures taken in the past three years to improve operations and maximize shareholder value, including enhancing merchandise assortment and better managing inventory using information technology. Shares of Dillard's (NYSE: DDS) closed Wednesday at $17.05, up 44 cents for a 2.7 percent gain. |
