French children’s clothing retailer Orchestra-Prémaman has reaffirmed its calls for Destination Maternity shareholders to vote for the removal of four directors it believes are contributing to the decline in value of the US maternity wear retailer.
The Destination Maternity stockholder, which made an unsolicited acquisition offer in 2015, has for the past month been seeking the resignation of the company’s four directors eligible for re-election, ahead of the AGM on 19 October.
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Destination Maternity earlier this month urged its shareholders to vote against Orchestra-Prémaman’s recommendation. But in a further push this week, the French company sent a letter to shareholders outlining the years of “drastic stock price free-fall” that have occurred while the directors have been in place. It also suggests these declines will not be reversed unless they are removed.
Destination Maternity fights move to oust directors
“We have invested more than US$15m into the company and like most of our fellow shareholders have seen a precipitous decline in the value of our shares – in fact, we have lost approximately 80% of the value of our Destination investment. We firmly believe that makes our interests aligned with all shareholders who want to see shareholder value restored to our company.
“We are giving you the shareholders the power to cause that change that is needed by voting against all the Status Quo Nominees. Hold them accountable for the decline. If you have already voted the company’s card, a later-dated blue voting form will revoke your previously cast vote. Only the latest dated vote counts.”
Orchestra-Prémaman, which holds a 13.8% share in Destination Maternity, names the directors as Michael Blitzer, Barry Erdos, Melissa Payner-Gregor and B Allen Weinstein.
The company says the directors have failed to implement their own “vague” 2014 turnaround plan, and are now executing “some future turnaround plan they are still developing at unknown expense.”
“As shareholders, we have an opportunity to finally hold the board accountable. The company has massively underperformed, and it has repeatedly failed to deliver against its own stated “turnaround plan”. Orchestra supports your desire to maximise the long-term value of Destination stock. That is exactly the same as our desire at Orchestra. Use the enclosed blue voting form to make a change. It gives you the opportunity to refresh the board.”
Destination Maternity, which operates the Motherhood Maternity, A Pea in the Pod, and Destination Maternity brands in the US and Canada, has been focusing on improving inventory management, driving sales productivity, optimising real estate, expanding its online presence and controlling costs.
Earlier this week, the company announced plans to launch mobile sites for several of its brands, giving customers an improved online merchandise selection and an easier check out process.
The business has, however, been challenged by a number of factors such as weakness in the women’s speciality apparel retail space, as well as declining mall-based traffic. As such, in its second-quarter, the company widened its net loss, as both net and comparable sales slipped.
