Dive Brief:
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There’s a proxy battle heating up at Secaucus, NJ-based children’s clothing retailer Children’s Place. Activist investors Macellum Advisors and Barington Capital, which control 2% of shares, have nominated retail veterans Seth Johnson and Robert Mettler, whom the company rejected without meeting them, they said.
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The firms say prices at the retailer are too high, leading to massive discounting in order to move merchandise, and that CEO Jane Elfers is overpaid considering that sales continue to fall.
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UPDATE: Shareholders for Change at The Children's Place, a group led by Macellum Advisors GP, LLC and Barington Capital Group, L.P., who collectively own some 2.1% of shares, Tuesday released its open letter to shareholders in which it highlights the retailer's "prolonged underperformance" under the current board, argues against some of the retailer's statements, and urges the election of its board nominations.
Dive Insight:
Children’s Place will elect three new board members May 22, and this move by two activist investors is making that messy. The largely mall-based retailer and the largest U.S. children’s-only clothing retailer is struggling with sales, though its Wall Street performance remains healthy.
The company staunchly defended its performance and its CEO, whom the investors are agitating against in particular. The investors’ move comes as Wal-Mart Stores Inc. has tied its executive pay more closely to sales, and the Security and Exchange Commission has developed rules to do that more easily.
“We see no reason why Ms. Elfers should be so richly rewarded while [Children’s Place] performed significantly worse than Carter’s,” the investors’ report reads.