An activist investor attempting to execute a turnaround at Kohl’s Corp. now has its sights set on another retailer.
Today, Genesco Inc. confirmed that Legion Partners Asset Management LLC has informed it of its intention to nominate a controlling slate of seven individuals for election to its board of directors.
According to the company, its board, as well as the nominating and governance committee, will review the proposed nominees and present the recommendation in its definitive proxy materials, which will be filed with the Securities and Exchange Commission and mailed to all shareholders eligible to vote at its upcoming annual shareholder meeting. (The date of the meeting has yet to be announced.)
This morning, Legion — which owns about 5.6% of outstanding common shares of GCO — issued a letter to shareholders, writing that the decision to seek boardroom change comes as Genesco has “failed to build on the momentum we helped establish, and the company is now on a concerning, downward trajectory that could result in the permanent impairment of value.”
The firm nominated Marjorie Bowen, who previously served as an independent director of Genesco; Thomas Kibarian, former CEO at home decor company At Home Group Inc.; Margenett Moore-Roberts, chief inclusion and diversity officer at global marketing collective IPG DXTRA; Dawn Robertson, who has worked at Old Navy and Macy’s, among other retailers; Nike veteran Patricia Ross; capital markets executive Georgina Russell; and former Burlington Stores Inc. EVP and CMO Hobart Sichel.
In response, the Nashville, Tenn.-based chain issued a statement that it “disagree[d] with many of Legion’s assertions and are surprised that they are seeking to replace a majority of Genesco’s eight-member board after not responding to our repeated requests for their input and ideas or sharing their proposed candidates in advance.”
It added, “We value all feedback from shareholders and will continue to seek to have a constructive dialogue with Legion like we would with any shareholder … Genesco’s board and recently appointed management team are committed to acting in the best interests of all shareholders and executing on our plans to drive meaningful growth and shareholder value creation.”
For the fourth quarter, reported last month, Genesco posted a profit and sales beat: It logged adjusted earnings of $2.76 per share, compared with the prior year period’s adjusted earnings of $3.09 per share. Market watchers had predicted earnings of $1.96 per share. Revenues dropped 6% to $637 million but were also better than forecasts of $617.55 million.
Less than two months ago, Legion and three other investors — Macellum Advisors GP LLC, Ancora Holdings Inc. and 4010 Capital LLC — announced that it had nominated nine directors in an attempt to take control of Kohl’s board. It revised its proxy statement in mid-March to nominate just five individuals. Early this month, Kohl’s urged shareholders to vote for the reelection of current members of its board at its annual meeting scheduled on May 12.