UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
The Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☐
Filed by a Party other than the Registrant ☒
Check the appropriate box:
|
☐
|
Preliminary Proxy Statement
|
|
☐
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
|
☐
|
Definitive Proxy Statement
|
|
☒
|
Definitive Additional Materials
|
|
☐
|
Soliciting Material Under Rule 14a-12
|
CITI TRENDS, INC.
|
(Name of Registrant as Specified in Its Charter)
|
|
MACELLUM ADVISORS GP, LLC
MACELLUM SPV III, LP
MACELLUM CAPITAL MANAGEMENT, LLC
MACELLUM MANAGEMENT, LP
MCM MANAGEMENT, LLC
MCM MANAGERS, LLC
JONATHAN DUSKIN
PAUL METCALF
|
(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
|
Payment of Filing Fee (Check the appropriate box):
|
☐
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
(1)
|
Title of each class of securities to which transaction applies:
|
|
(2)
|
Aggregate number of securities to which transaction applies:
|
|
(3)
|
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was determined):
|
|
(4)
|
Proposed maximum aggregate value of transaction:
|
|
☐
|
Fee paid previously with preliminary materials:
|
☐ Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of
its filing.
|
(1)
|
Amount previously paid:
|
|
(2)
|
Form, Schedule or Registration Statement No.:
|
Macellum Advisors GP, LLC,
together with its affiliates (collectively, “Macellum”), has made a definitive filing with the Securities and Exchange
Commission of a proxy statement and accompanying WHITE proxy card to be used to solicit votes for the election of its slate of
highly-qualified director nominees to the Board of Directors of Citi Trends, Inc., a Delaware corporation (the “Company”),
at the Company’s upcoming 2017 annual meeting of stockholders, or any other meeting of stockholders held in lieu thereof,
and any adjournments, postponements, reschedulings or continuations thereof.
On May 15, 2017, Macellum issued the
following press release:
ISS Recommends Citi Trends
Stockholders Vote Macellum’s
WHITE
Proxy Card
|
·
|
ISS says Macellum “has made a compelling case that change at
the board level is warranted”
|
|
·
|
ISS supports Macellum’s Jonathan Duskin for election to the
board
|
|
·
|
Vote the
WHITE
Macellum proxy card today to elect Jonathan
Duskin and Paul Metcalf
|
New York, New York (May 15, 2017) -- Macellum SPV
III, LP, Macellum Advisors GP, LLC, and certain of their affiliates (collectively, “Macellum”), a large stockholder
of Citi Trends, Inc. (NASDAQ: CTRN) (the “Company” or “Citi Trends”) that has nominated two highly qualified
candidates for election at the Company’s upcoming annual meeting of stockholders, announced today that Institutional Shareholder
Services (“ISS”), the leading independent proxy voting advisory firm, has recommended that stockholders vote on Macellum’s
WHITE
proxy card FOR the election of Macellum nominee Jonathan Duskin at the upcoming annual meeting of stockholders.
Jonathan Duskin, the CEO of Macellum, responded
to the ISS report, stating, “We are gratified that ISS recognized the need for direct stockholder representation on Citi
Trends’ Board. We believe the current Board, under the helm of Executive Chairman Ed Anderson, has presided over a period
of significant destruction of stockholder value. The Board must be held accountable for the material deterioration of Citi Trends’
share price and operating performance and its disruptive CEO turnover. We are hopeful that after reviewing the ISS report, stockholders
will agree with us that the Board’s assertions that their strategy is working and their most recent claim that they began
a purported company-saving “strategic pivot” in 2012 under Chairman Anderson simply have no merit.”
Mr. Duskin also commented on ISS’ failure
to recommend the election of Macellum nominee Paul Metcalf, stating, “While we are pleased with ISS’ vote of confidence
in me and desire for change, we believe it is critical for stockholders to vote for the election of
both
myself and Paul
Metcalf to the Board at the annual meeting. We believe the election of both of us and the removal of Chairman Anderson represents
the best means for significant value creation at the Company. Unless Chairman Anderson is removed, we are concerned that the current
Board may not act independently to ensure the best interests of all stockholders are fulfilled. We are also extremely concerned
that high quality, prospective CEO candidates are reluctant to consider the opportunity to join the Company given former CEO Jason
Mazzola’s departure for a substantially lesser role. Our biggest fear is that the Board will promote current CFO Bruce Smith,
who has no merchandising experience, to the role of permanent CEO. Nevertheless, we believe the recommendation from ISS validates
our strong belief that change is required now to deliver much needed accountability and fresh perspective to the boardroom. To
that end, Mr. Metcalf has over 30 years of operating and merchandising experience, including significant operational turnaround
expertise in off-price retail and would be significantly valuable in recruiting and vetting potential candidates. We welcome the
ISS endorsement and urge our fellow Citi Trends stockholders to vote their
WHITE
proxy today to elect
both
Macellum nominees.”
In recommending that Citi Trends stockholders elect
Macellum nominee Jonathan Duskin, ISS stated
1
:
“As a direct and significant shareholder,
dissident nominee Jonathan Duskin is positioned to provide the additional perspective of a significant shareholder as the board
oversees the critical tasks outlined above.”
While Citi Trends has blamed its poor operating results on
the declining demand for urban brands, ISS concurred with Macellum that these results were self-inflicted:
“However, by management’s own account, these
results are also due to successive missteps in merchandising, namely in identifying and procuring compelling, on-trend merchandise
that would drive sales in Citi Trends’ target market. Whether these merchandising missteps were due to missing trends in-season,
or attributable to being locked into stale inventory from pre-ordering as a cost-control strategy, they resulted in the same effect.”
“Thus, it appears the issue was not that the target
market was not buying apparel in 2011 and 2012; it’s that the target market was not buying Citi Trends’ apparel in
2011 and 2012, and instead chose to spend those dollars elsewhere.”
“Brands disappearing in rapid succession would certainly
be challenging to a retailer that specializes in selling those brands. However, this occurrence has enough precedent in the urban
branded space to perhaps be considered a cyclicality . . . It has also previously been the case that the target market has pivoted
toward adapting mainstream brands, for instance: Polo, Guess, Nautica, Girbaud, and Tommy Hilfiger, to name a few. Why the board
was not able to recognize one iteration of said cyclicality early on is an open question.”
“While the exact degree to which off-price retail
is truly comparable to the company is debatable, the company’s series of damaging missteps in merchandising—discernable
from management’s own account during quarterly updates as well as from demographic and company data—is not.”
ISS was particularly critical of Citi Trends’ lack
of succession planning for the CEO position:
“The CEO role has changed hands four times within
the last eight years . . . In the case of the Mazzola departure, the decision to call Anderson out of retirement for a second time
in eight years while also tasking Smith (who was already serving as COO, CFO, and corporate secretary) with the role of CEO is
a conspicuous indication of a lack of forward planning.”
1
Permission to quote from the ISS report in this press release was neither sought nor obtained.
ISS echoed Macellum’s concerns regarding Citi Trends’
uncertain future strategy and business direction, which led to ISS’ conclusion that change on the Board is warranted (and
which is why we believe it is so important for
both
Jonathan Duskin and Paul Metcalf to be elected to the Board):
“However, the company’s messaging regarding
its business strategy going forward remains muddled, and many investors remain unclear as to whether the company’s future
direction will bend towards off-price retail or economy-priced, private label fashion. With this in mind, it is clear that the
board can benefit from additional perspectives, most critically perspectives relating to the board’s immediate task of finding
a permanent CEO. On balance, the dissident has made a compelling case that some level of change at the board level is warranted.”
In conclusion, ISS stated:
“As a direct and significant shareholder,
dissident nominee Jonathan Duskin is positioned to provide the additional perspective of a significant shareholder as the board
oversees the critical tasks outlined above.”
ISS
HAS RECOMMENDED Citi Trends STOCKHOLDERS VOTE THE
white
PROXY CARD
vote
the
white
proxy card today to elect
both
of our highly-qualified nominees — Jonathan Duskin and Paul Metcalf
— to the Board at the Company’s upcoming annual meeting
If you have already voted Citi Trends’ blue
proxy card, a later dated
WHITE
proxy card will revoke your previously cast vote.
Investor Contact:
Jonathan Duskin
Macellum Capital Management, LLC
(212)-956-3008
Jduskin@macellumcap.com
John Ferguson
Saratoga Proxy Consulting LLC
(212) 257-1311 or (888) 368-0379
Info@saratogaproxy.com
Citi Trends (NASDAQ:CTRN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Citi Trends (NASDAQ:CTRN)
Historical Stock Chart
From Jul 2023 to Jul 2024