Citi Trends, Inc. Issues Statement Regarding Director Nominations
March 09 2017 - 10:08AM
Business Wire
Company Held Discussions with Macellum and
Offered to Work Together Constructively and Evaluate the Merits of
Adding Two New Qualified and Mutually Agreed Upon Independent
Directors
Citi Trends, Inc. (“Citi Trends” or the “Company”) (NASDAQ:CTRN)
today acknowledged receipt of and provided important context
regarding a letter authored by Macellum Advisors GP, LLC
(“Macellum”) stating Macellum’s intent to nominate a slate of
director candidates to stand for election to the Citi Trends Board
of Directors (the “Board”) at the Company’s 2017 Annual Meeting of
Stockholders (the “2017 Annual Meeting”).
The Board and management team are committed to acting in the
best interests of all Company stockholders and welcome their views
in order to pursue our common goal of maximizing long-term
stockholder value. To that end, members of management met with Mr.
Jonathan Duskin, CEO and Portfolio Manager of Macellum Capital
Management, LLC, and certain of his colleagues, multiple times over
the last few years at several industry conferences to hear their
input and suggestions with an open mind.
Macellum first approached Citi Trends regarding Board
representation in early February of this year, when it demanded
that the Company immediately add two independent directors to the
Board and stated a strong preference for Mr. Duskin to be one of
those directors. Despite the fact that Macellum had not provided
names or biographical information for any director candidates aside
from Mr. Duskin at that time, the Board was informed of Mr.
Duskin’s position and took his views under consideration.
While the Board determined that changing the Board as Mr. Duskin
had proposed was not in the best interest of Citi Trends and its
stockholders, in an effort to be constructive, the Company
communicated privately with Mr. Duskin that it was willing to
consider adding one new, qualified independent director not
affiliated with Macellum who would be mutually agreed upon by Mr.
Duskin and the Company. This offer was rejected.
Macellum then formally submitted a proposal to nominate Mr.
Duskin and three other director candidates to stand for election.
The Board, again, in an effort to resolve this matter, communicated
that it was prepared to interview and evaluate the nominees, other
than Mr. Duskin himself. If the Board determined one or more of the
candidates to be both unaffiliated with Macellum and qualified to
serve as directors, it would consider adding up to two of them to
the Board.
Both parties agreed to proceed with preparing a settlement
agreement that reflected the Company’s offer. Upon receipt of the
settlement agreement, Mr. Duskin rejected it and demanded, among
other things, that he and one other individual be added to the
Board immediately. In a further attempt to resolve this matter, the
Board communicated that it was willing to add to the Board two
qualified and mutually agreed upon individuals. Mr. Duskin also
rejected this offer. While the Company believes its current Board
is comprised of highly qualified individuals with compelling
backgrounds in retail merchandising, operations and finance, the
Board is always willing to consider adding additional qualified
individuals who can help drive long term stockholder value for the
benefit of all stockholders. Mr. Duskin was unwilling to even
consider a normal vetting process and was adamant about adding
himself and candidates of his choosing to the Board.
It is disappointing that Mr. Duskin rejected multiple
opportunities provided by the Company to resolve this matter
constructively and chose instead to pursue a costly contested
election process. Regardless, the Board and management team remain
committed to creating value for all Citi Trends stockholders, and
are confident in the strategy the Company is executing to deliver
on this responsibility.
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 2017 Annual Meeting, which is
currently scheduled for May 24, 2017. Stockholders are not required
to take any action at this time.
About Citi Trends, Inc.
Citi Trends, Inc. is a value-priced retailer of urban fashion
apparel and accessories for the entire family. The Company operates
537 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 and objectives of
management for future operations, 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 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 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. Citi Trends intends
to file a 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 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’
2017 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
January 30, 2016, filed with the SEC on April 13, 2016 and its
Quarterly Reports on Form 10-Q for the first three quarters of the
fiscal year ended January 28, 2017 filed on May 31, 2016, August
29, 2016 and December 5, 2016, 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: http://www.businesswire.com/news/home/20170309005842/en/
Investors:Okapi PartnersBruce Goldfarb, Chuck Garske and Teresa
Huang212-297-0720orMedia:ICRPhil
Denning646-277-1258phil.denning@icrinc.com
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