Company highlights progress on strategic
plan
Citi Trends, Inc. (NASDAQ:CTRN) today confirmed that Macellum
SPV III, LP (“Macellum”) has provided notice of its nomination of
four individuals to stand for election to the Citi Trends Board of
Directors at the Company’s 2019 Annual Meeting of Stockholders
(“2019 Annual Meeting”).
The Board's recommendation regarding director nominees will be
made in the Company's definitive proxy materials, which will be
filed with the Securities and Exchange Commission and mailed to all
stockholders eligible to vote at the 2019 Annual Meeting. The date
of the Company’s 2019 Annual Meeting has not yet been announced.
Stockholders are not required to take any action at this time.
The Company issued the following statement:
Citi Trends is executing on a strategic plan focused on growing
our business by being the leader in providing value-priced urban
fashions to our customers. The Company has already begun to make
progress on that plan, which includes operational initiatives to
improve freight efficiencies and reduce several operating expense
categories, systems initiatives such as store level merchandise
planning and markdown optimization, and a test of the opportunity
in Hispanic-dominated markets. Citi Trends recently provided
details regarding its performance and long-term growth
opportunities and goals as a result of these initiatives,
including:
- Fiscal 2018 earnings per share up 59%
year over year;
- Earnings per share of $4 within the
next five years;
- Consistent comparable store sales
growth in the range of approximately 3%;
- Projected annual store square footage
growth of 4% to 5%;
- Store base potential up to 800 stores;
and
- Continued return of excess capital to
stockholders, including the authorization of a $25 million share
repurchase program. In 2018, the Company returned approximately $45
million to stockholders in the form of repurchases and
dividends.
The Citi Trends Board – other than Jonathan Duskin, who is the
Chief Executive Officer of Macellum and a current member of the
Citi Trends Board – comprises six highly qualified directors, five
of whom are independent, and all of whom are actively engaged in
the execution of the Company’s plan. These directors have a wide
range of relevant and critical experiences, including in the areas
of finance, merchandising, retail operations, distribution,
marketing and advertising.
Importantly, the Board has been committed to regular refreshment
and has reduced the average tenure of its independent board members
to approximately six and a half years. To that end, as part of its
regular refreshment process, the Board is undergoing a
comprehensive search for the best director candidates to further
enhance the skills and expertise of the current Board and did not
want to limit itself to one director’s suggestions. The Board has
evaluated Macellum’s nominees as part of that process and will soon
communicate its recommendations to stockholders.
The Board has held numerous discussions over the last few weeks
with Mr. Duskin regarding board composition and the Board’s ongoing
director search process. These conversations were aimed at
preventing Mr. Duskin from waging yet another costly proxy fight.
Despite Macellum’s misleading claims, the Board has held these
conversations with the goal of working collaboratively and coming
to a conclusion that benefits all stockholders. On the other hand,
Mr. Duskin has requested being compensated for the fees his firm
incurred as a result of his proxy contest of two years ago, which
is inconsistent with his statements regarding the Company wasting
stockholder resources. The Company is disappointed that Mr. Duskin
has, once again, threatened a prolonged and expensive fight, rather
than resolving this matter constructively.
The Board and management team are committed to acting in the
best interests of all Company stockholders and as always, remain
open to constructive views from its stockholders towards the common
goal of maximizing long-term stockholder value.
About Citi Trends
Citi Trends, Inc. is a value-priced retailer of urban fashion
apparel and accessories for the entire family. The Company operates
562 stores located in 32 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 repurchase authorizations, 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, although not all
forward-looking statements contain such language. 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 U.S. Securities and Exchange Commission (the
“SEC”), including those set forth under the heading “Item 1A. Risk
Factors” in the Company’s Annual Report on Form 10-K for the fiscal
year ended February 3, 2018. 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 and the ability to
anticipate and respond to fashion trends. Any forward-looking
statements by the Company 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 SEC, 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’ 2019 Annual Meeting. Citi Trends intends
to file a proxy statement with the SEC in connection with any such
solicitation of proxies from Citi Trends stockholders. INVESTORS
AND STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY SUCH PROXY
STATEMENT AND ACCOMPANYING PROXY CARD AND OTHER DOCUMENTS FILED
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Detailed
information regarding the identity of potential participants, and
their direct or indirect interests, by security holdings or
otherwise, will be set forth in the proxy statement and other
materials to be filed with the SEC in connection with Citi Trends’
2019 Annual Meeting. Information regarding the direct and indirect
beneficial ownership of Citi Trends’ directors and executive
officers in Citi Trends securities is included in their SEC filings
on Forms 3, 4 and 5, and additional information can also be found
in Citi Trends’ Annual Report on Form 10-K for the year ended
February 3, 2018, filed with the SEC on April 18, 2018 and its
Quarterly Reports on Form 10-Q for the first three quarters of the
fiscal year ended February 2, 2019 filed on June 11, 2018,
September 6, 2018 and December 10, 2018, respectively. Stockholders
will be able to obtain any 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 will also be available at no charge at the
Investor Relations section of our corporate website at
www.cititrends.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20190318005778/en/
Contact:
Bruce SmithPresident and Chief Executive Officer(912)
443-2075
Media Contact:
Andy Brimmer / Greg KlassenJoele Frank, Wilkinson Brimmer
Katcher(212) 355-4449
Investor Contact:
Bruce Goldfarb / Chuck Garske / Teresa HuangOkapi Partners
LLC(212) 297-0720
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