Activist investor Barington Capital Group has issued a second open letter to shareholders at US women's wear retailer Chico's FAS, urging them to "stop, look and listen" before voting for two directors to serve on the company's nine-person board. 

The letter, dated 7 June, comes amid a deepening rift between the retailer and the fund manager.

In the first letter to Chico's shareholders on Friday (3 June), Barington said it is seeking to add two of its representatives – Janet Grove and James Mitarotonda – to the company's board of directors in a bid to improve the company's "vast value potential" and to ensure that stockholder interests are represented in the Chico's boardroom.

Chico's shareholder Barington claims change is needed

Chico's, meanwhile, has nominated Bonnie Brooks, vice chairman of Hudson's Bay Co, and Bill Simon, the former president and CEO of Walmart's US operations, to the board

The retailer claims Barington's nominees have already been "thoughtfully reviewed and ultimately rejected", and says that replacing any of the company's director candidates with Barington nominees would "deprive the company of skills and expertise that would significantly contribute to the progress [it is] making".

Chico's filed definitive proxy materials yesterday, calling on the company's shareholders to support its nominated independent directors who will stand for election to the board on 21 July.

Signed by David F Walker, chair of Chico's board, its letter claims "positive change is underway at Chico's" and that the future of the company is "bright". Walker adds: "We are confident that the changes we are making and the actions we are taking will lead to improved performance and enhanced value creation for all Chico's FAS shareholders."

The company recently posted a fall in profits, with net income slipping to $31.1m from $32.5m a year earlier, and net sales dropping 7.9% to $643m. Chico's has outlined new initiatives to improve its supply chain, enhance marketing efforts and leverage non-merchandise procurement.

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