Highlights Strong and Improving Financial Results - the Company's
Strategy is Working
Announces Company Proposal to Declassify Board of Directors at 2018
Urges Stockholders to Vote on the BLUE Proxy Card "FOR" each of Citi
Trends' Highly Qualified and Experienced Directors
SAVANNAH, Ga.--(BUSINESS WIRE)--
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
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:
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.
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/
Phil Denning, 646-277-1258
Bruce Goldfarb, Chuck Garske and Teresa Huang, 212-297-0720
Source: Citi Trends, Inc.
News Provided by Acquire Media