Pier 1 Board Fires Back at Shareholder
Posted on October 17, 2016 by
FORT WORTH, Texas—Alden Global Capital’s call to reconstitute Pier 1 Imports’ board of directors could hurt the specialty retailer’s business and its efforts to find a successor to Alex Smith as president and CEO, the retailer said in a statement issued on Friday.
The statement is a response to a letter from Alden, Pier 1’s largest shareholder, which criticized the board for the retailer’s poor financial performance over the past several years. Alden said its president, Heath Freeman, and “additional independent and highly qualified directors” recommended by the firm should be appointed to the board to quicken Pier 1’s search for a new CEO.
“This ultimatum, coupled with the threat to run a consent solicitation to replace the board, is not constructive and could erode shareholder value by undermining the company’s announced CEO search and disrupting its business in the holiday selling season,” Pier 1 said.
The retailer’s statement also took issue with Alden’s contention that the board is responsible for Pier 1’s recent poor financial performance. “The company is making significant progress under its omnichannel strategy, with e-commerce now representing 20 percent of Pier 1 Imports’ sales,” the retailer said. “As we enter the critical holiday season, the board of directors is confident that the programs underway will drive sales and expand market share—and recent operating results are encouraging. Pier 1 Imports has a highly qualified, diverse board with significant retail experience which was reelected with greater than 98 percent approval by our shareholders at our annual meeting less than four months ago.”
Pier 1 also said it would continue to work with Alden to resolve their differences. The retailer is “mindful of Alden’s significant investment and will continue to engage and attempt to work collaboratively with Alden and all our stockholders to help the company achieve success and enhance value for all stockholders.”
As of press time, Alden had not replied to a request for comment from HFN.