Highlights Strong and Improving Financial
Results - the Company’s Strategy is Working
Announces Company Proposal to Declassify Board
of Directors at 2018 Annual Meeting
Urges Stockholders to Vote on the BLUE Proxy
Card “FOR” each of Citi Trends’ Highly Qualified and Experienced
Directors
Citi Trends, Inc. (“Citi Trends” or the “Company”) (NASDAQ:CTRN)
today urged its stockholders to vote FOR each of the Company’s
three highly qualified and experienced director nominees: Barbara
Levy, Lawrence E. Hyatt and R. Edward Anderson. With the Company’s
Annual Meeting of Stockholders fast approaching on May 24th, now is
the time for stockholders to cast their votes on the BLUE proxy
card and secure the future of their Citi Trends investment.
This year's vote is particularly significant as Macellum
Advisors GP, LLC and certain affiliated entities (collectively,
“Macellum”), has nominated two individuals in opposition to two of
the Company’s three incumbent director nominees. One of the
dissident nominees, Macellum’s Portfolio Manager Jonathan Duskin,
boasts of being a “retail expert” and an “excellent board member” –
these claims, however, are simply disconnected from reality. In Mr.
Duskin’s wake as a director lie a slew of companies that have
either seen their value slashed, or worse yet, gone into
liquidation or bankruptcy.
A vote for your Board is a vote for proven
value creation, even against the backdrop of a collapsing apparel
marketplace. A vote for Mr. Duskin is a vote for proven value
destruction.
Based on the flawed analysis, false narratives and unwarranted
critiques submitted by Macellum throughout this contested election
campaign, the Board is confident that the election of any of
Macellum’s nominees at the upcoming Annual Meeting would present
significant risks to the value of stockholders’ investment in Citi
Trends.
THE CITI TRENDS BOARD HAS THE RIGHT
LEADERSHIP TO DRIVE CONTINUED GROWTH, AND IS COMMITTED TO CORPORATE
GOVERNANCE BEST PRACTICES
Citi Trends’ Board is highly engaged with and oversees the
Company’s experienced senior management team, providing oversight
and accountability in all key aspects of the business. The
Company’s directors have a deep understanding of the urban apparel
and specialty retail industries in which Citi Trends operates, and
they are dedicated to corporate governance practices that promote
the long term success of the Company and deliver value to
stockholders.
To that end, the Board has committed to presenting a proposal to
declassify the Board in the proxy statement for the Company’s 2018
annual meeting of stockholders, which would result in annual
elections for directors for one-year terms. Following stockholder
feedback and a thorough evaluation of the benefits and hindrances
of a classified board structure, the Board concluded that a
declassified board is in the best interests of Citi Trends and its
stockholders.
In addition to creating and enhancing stockholder value, the
Board is also committed to responsibly returning capital to its
stockholders. After the strategic merchandising pivot implemented
in 2012 successfully restored the Company’s profitability, growth
and stability to levels that warranted a prudent return of cash to
Citi Trends stockholders, the Board announced and completed a $15
million repurchase program and instituted a regular quarterly
dividend in 2015.
This year, the Board announced an expanded capital return
program, which aims to return approximately $30 million to
stockholders over the next 12 months, in the form of a 33%
quarterly dividend increase and a new share repurchase program of
up to $25 million. These actions are a direct result of the Board’s
ongoing disciplined and responsible fiscal stewardship, and serve
as direct evidence of the success of the Board’s existing
strategy.
CITI TRENDS HAS GENERATED SUPERIOR TOTAL
RETURNS IN A CHALLENGING RETAIL ENVIRONMENT, AND ITS CURRENT
STRATEGY IS YIELDING TANGIBLE RESULTS
Citi Trends’ Board of Directors acted quickly and decisively to
proactively manage out of a declining business, which has enabled
the Company to deliver a total stockholder return of 50.3% over the
last five years, compared with 25.1% and a negative 34.3% from the
S&P 600 Retailing Index and Citi Trends’ peer group,
respectively. The 2012 transformation that followed the collapse of
the urban branded apparel phenomenon enabled the Company not just
to survive, but evolve and actually outperform its peers over the
subsequent five years.
Today, Citi Trends is executing a well-defined strategy that is
already driving substantially improved performance, as illustrated
by the most recent quarterly financial results. Total sales in the
13-week period ended April 29, 2017 increased 3.2% to $200.0
million and net income adjusted for proxy contest expenses
increased 14%, while comparable store sales increased despite a
delay in tax refund distributions.
The Company’s strategy is working - do not
let Macellum derail this forward progress through its unwise and
unrealistic proposals to change Citi Trends’ merchandise
assortment, target demographic and brand DNA.
MACELLUM’S NOMINEES OFFER NO NEW RELEVANT
EXPERIENCE, SKILLS OR PRESPECTIVE – DO NOT ALLOW THEM TO DERAIL
CITI TRENDS PROGRESS
As part of their campaign against Citi Trends, Macellum seeks to
elect two nominees that have NO track record of creating
value on public company boards to replace two of your highly
qualified directors, Executive Chairman Ed Anderson and Lawrence
Hyatt.
- Mr. Anderson has in-depth knowledge of
Citi Trends and its target customers, attained from his tenure of
more than 11 years as CEO and 15 years as a director. In addition,
Mr. Anderson has more than three decades of relevant executive
management experience and a distinguished career of leadership in
other companies in our industry.
- Mr. Hyatt, a former public company CFO,
has advised companies in a range of sectors and has particular
knowledge of the retail industry from his senior executive roles at
Cracker Barrel and Cole National Corporation and service on your
Board. Mr. Hyatt currently serves as the chairman of the Audit
Committee.
Who is Macellum recommending to replace Mr. Anderson and Mr.
Hyatt? The first, Jonathan Duskin, is an individual who has
NO retail operating experience, NO understanding of
the urban fashion market and repeatedly destroyed
stockholder value as a director. Every company where Mr. Duskin has
served as a director has gone bankrupt, been
liquidated, or experienced a significant loss in
stockholder value, which constitutes a track record that is
directly at odds with the “retail expert” title with which he has
anointed himself.
Do not let Citi Trends become yet another
case study of Mr. Duskin’s inability to create value as a board
member.
Furthermore, Mr. Duskin’s behavior and approach as an activist
have been nothing but ill-informed, antagonistic and disruptive,
which would ultimately impact the Board’s ability to effectively
oversee the business if he were elected as a director. The Company
has serious concerns that, given his poor credentials, ignorance of
the apparel industry and apparent knack for destroying value, Mr.
Duskin’s presence in the Boardroom would have an immediate and
significantly negative impact on Citi Trends’ abilities to recruit
and retain talent. With the executive transition currently
underway, this is simply unacceptable.
Paul Metcalf, Macellum's other nominee, has NO public board
experience, extremely limited public company management experience
and NO experience focused on the urban fashion market.
The skills and abilities of your incumbent directors, who have
successfully designed, implemented and overseen the Company’s
current strategic plan, stand in stark contrast with those of the
individuals proposed by Macellum.
Electing Citi Trends’ incumbent directors
will allow the Company’s forward momentum to continue
uninterrupted.
PROTECT THE VALUE OF YOUR INVESTMENT IN CITI
TRENDS:VOTE THE BLUE PROXY CARD
TODAY
Citi Trends strongly recommends its stockholders vote
“FOR” ALL of its experienced and highly qualified director
nominees on the BLUE proxy
card: Barbara Levy, Lawrence E. Hyatt, and R. Edward
Anderson.
Stockholders can vote for Citi Trends directors by telephone,
online or by signing, dating and returning the BLUE proxy card. If
you have any questions or need assistance voting, please call Okapi
Partners LLC, our proxy solicitor, at (212) 297-0720 or toll-free
at (877) 566-1922.
About Citi Trends
Citi Trends, Inc. is a value-priced retailer of urban fashion
apparel and accessories for the entire family. The Company operates
538 stores located in 31 states. Citi Trends' website address is
www.cititrends.com. CTRN-G
Forward-Looking
Statements
All statements other than historical facts contained in this
news release, including statements regarding our future financial
results and position, business policy and plans, objectives of
management for future operations and our intentions and ability to
pay dividends and complete any share repurchases, are
forward-looking statements that are subject to material risks and
uncertainties. The words "believe," "may," "could," "plans,"
"estimate," "continue," "anticipate," "intend," "expect" and
similar expressions, as they relate to Citi Trends, are intended to
identify forward-looking statements. Investors are cautioned that
any such forward-looking statements are not guarantees of future
performance or results and are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified.
Actual results or developments may differ materially from those
included in the forward-looking statements as a result of various
factors which are discussed in Citi Trends filings with the
Securities and Exchange Commission. These risks and uncertainties
include, but are not limited to, uncertainties relating to economic
conditions, growth risks, consumer spending patterns, competition
within the industry, competition in our markets, the ability to
anticipate and respond to fashion trends and the outcome of our
current proxy fight and any other actions of activist stockholders.
Any forward-looking statements by the Company with respect to the
Company’s intention to declare and pay dividends, repurchase shares
pursuant to the share repurchase program, or otherwise, are
intended to speak only as of the date such statements are made.
Except as required by applicable law, including the securities laws
of the United States and the rules and regulations of the
Securities and Exchange Commission, Citi Trends does not undertake
to publicly update any forward-looking statements in this news
release or with respect to matters described herein, whether as a
result of any new information, future events or otherwise.
Important Additional
Information
Citi Trends, its directors and certain of its executive officers
may be deemed to be participants in the solicitation of proxies
from Citi Trends stockholders in connection with the matters to be
considered at Citi Trends' 2017 Annual Meeting to be held on May
24, 2017. On April 3, 2017, Citi Trends filed a definitive proxy
statement (the “Proxy Statement”) with the U.S. Securities and
Exchange Commission (the "SEC") in connection with any such
solicitation of proxies from Citi Trends stockholders. INVESTORS
AND STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY
STATEMENT AND ACCOMPANYING BLUE PROXY CARD WITH RESPECT TO THE 2017
ANNUAL MEETING, AND OTHER DOCUMENTS FILED WITH THE SEC, CAREFULLY
AND IN THEIR ENTIRETY AS THEY CONTAIN IMPORTANT INFORMATION.
Detailed information regarding the identity of potential
participants, and their direct or indirect interests, by security
holdings or otherwise, is set forth in the Proxy Statement and
other materials filed with the SEC in connection with Citi Trends'
2017 Annual Meeting. Stockholders may obtain the Proxy Statement,
any amendments or supplements to the Proxy Statement and other
documents filed by Citi Trends with the SEC for no charge at the
SEC's website at www.sec.gov. Copies are also available at no
charge at the Investor Relations section of our corporate website
at www.cititrends.com.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170522005463/en/
Media:ICRPhil Denning,
646-277-1258phil.denning@icrinc.comorInvestors:Okapi
PartnersBruce Goldfarb, Chuck Garske and Teresa Huang,
212-297-0720
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