Crescendo Partners and Myca Partners have been pushing for change in the plus-size clothing manufacturer after “disastrous stock performance” and a “lack of focus on core assets." The hedge funds have a combined 7.9% stake in the company.

A recent letter to shareholders asks, "Who do you want leading Charming Shoppes in today’s challenging retail and economic environment? Seasoned directors and retail apparel directors or opportunistic hedge fund managers?"

Dorrit J. Bern, Chairman and CEO, Alan Rosskamm and M. Jeannine Strandjord are all up for re-election for Charming Shoppes board. Myca and Crescendo are hoping to elect Arnaud Ajdler, Managing Director of Crescendo, Michael Appel, Managing Director of Quest Turnaround Advisors, and Robert Frankfurt, President of Myca Partners, to the board.

“We believe the current Board of Directors and senior management are responsible and must be held accountable for a flawed business strategy and poor execution,” the hedge funds said in a statement.

Charming Shoppes has assured shareholders that they have streamlined business operatoins, reduced SG&A expenses and capital expenditures, and improved cash flow. They warn that if the hedge funds do take control, their actions would be highly disruptive to the company.

"To date, the dissident group has not articulated any new ideas to navigate your company through the current economic environment," the letter stated.  "Instead, they have put forth stale rhetoric taken directly out of the activist hedge fund playbook from the past."

Elections will take place at the annual meeting of shareholders on May 8.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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