Chico’s FAS is nominating two new independent board members as two current members prepare to retire and an investor says it will nominate its own two candidates.
The specialty apparel retailer has nominated Bonnie Brooks, vice chairman of Hudson's Bay Company, and Bill Simon, the former president and CEO of Walmart U.S., election to its board of directors at the 2016 annual meeting on June 16. In addition to Brooks and Simon, the company's slate will include Shelley Broader, president and CEO of Chico's FAS, and Janice Fields, current independent director of Chico's FAS and former president of McDonald's USA.
Chico's also announced that current directors David Dyer and Verna Gibson will retire from the board upon the completion of their current terms in 2016 following nine and 23 years of service, respectively.
Saying the company is significantly undervalued, Chico’s FAS investor Barington Capital Group plans to have an affiliate nominate two candidates for the retailer’s nine-member board of directors.
Barington, which has been investing in Chico's since December 2013 and owns approximately 1.4% of its outstanding common stock, believes that the company has failed to create meaningful long-term value for stockholders. Its nominees to the Chico’s board will be James A. Mitarotonda, 62, president and CEO of Barington Capital, and Janet E. Grove, 65, former vice chairman of Macy’s Inc. and chairman and CEO of Macy’s merchandising group. Mitarotonda has served on the boards of retailers including The Jones Group and Pep Boys.
Barington says it has been communicating privately with Chico’s since March 2016, urging the company to reduce its corporate overhead and significantly decrease its advertising and other SG&A expenses. Chico’s said the board reviewed Barington’s candidates and other candidates with the assistance of a third-party consulting firm, and unanimously determined that Brooks and Simon were best qualified.
"We are thrilled to welcome Bonnie and Bill as nominees to the board," said David F. Walker, chairman of the Chico's FAS board. "Under the leadership of our new CEO, Shelley Broader, Chico's FAS is taking meaningful steps to improve performance and value creation. We believe Bonnie's considerable apparel, merchandising, and turnaround expertise and Bill's impressive track record of driving cost efficient operations with other leading retailers will contribute to the progress we are making against the company's new operating priorities."