Pier 1 Imports has issued a statement in response to a public letter received by its board of directors from Alden Global Capital regarding that investment group’s call for changes to the retailer’s board of directors.
Last month, in a filing with the United States Securities and Exchange Commission, Alden stated that it has purchased 7.9 million shares of Pier 1 Imports stock, taking a 9.5% stake in the company. At the same time, it expressed a desire to become involved in directing the retailer’s business.
In the filing, Alden Capital noted that its representatives had “engaged, and intend to continue to engage, in communications with management and the board” on matters that include Pier 1’s “recent operational performance, shareholder representation on the board and the CEO search process.”
In its statement, Pier 1 noted that its “board of directors and management team are committed to acting in the best interests of all shareholders. The company is making significant progress under its omnichannel strategy, with e-commerce now representing 20% of Pier 1 Imports’ sales. As we enter the critical holiday season, the board of directors is confident that the programs underway will drive sales and expand market share, and recent operating results are encouraging. The board remains focused on the search for a new CEO to guide and execute the company’s strategy and create increased value for all shareholders.”
The statement continued, “Pier 1 Imports values constructive input from investors and regularly engages in dialogue with its shareholders regarding strategy and performance, including five recent meetings and calls with Alden. Nevertheless, Alden has demanded that the board be immediately reconstituted to include multiple Alden designees, including its president Heath Freeman. This ultimatum, coupled with the threat to run a consent solicitation to replace the board, is not constructive and could erode shareholder value by undermining the company’s announced CEO search and disrupting its business in the holiday selling season. Pier 1 Imports has a highly qualified, diverse board with significant retail experience which was reelected with greater than 98% approval by our shareholders at our annual meeting less than four months ago. Nonetheless, we are mindful of Alden’s significant investment and will continue to engage and attempt to work collaboratively with Alden and all our stockholders to help the company achieve success and enhance value for all stockholders.”
