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
SAVANNAH, Ga.--(BUSINESS WIRE)--
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170309005842/en/
Investors:
Okapi Partners
Bruce Goldfarb, Chuck Garske and
Teresa Huang
212-297-0720
or
Media:
ICR
Phil
Denning
646-277-1258
phil.denning@icrinc.com
Source: Citi Trends, Inc.
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