Shareholder drops Chico's proxy fight

FORT MYERS — Barington Capital Group says it has dropped its proxy battle for two nominees to the board of directors of Chico's FAS, but it pledged to keep the pressure on the struggling retailer.

Barington, which owns 1.6% of the stock of Fort Myers-based Chico's, argued the board needed to force more changes to boost its underperformance relative to its peers and the market. But late Friday it dropped its bid to elect two directors at the July 21 annual meeting when two leading proxy advisory firms backed the company's proposed directors instead of Barington's nominees.

Chico's new president and CEO, Shelley Broader, has argued that changes already are underway, including reducing costs by as much as $85 million. “In our view, Barington's decision to withdraw its director nominees and cease its proxy solicitation is consistent with the strong support we have received from Chico's FAS shareholders, numerous industry analysts and both of the nation's two leading independent proxy advisory firms, ISS and Glass Lewis,” Chico's says in a statement.

“For the past several months, we have worked tirelessly to ensure that positive changes are made at Chico's,” says James Mitarotonda, the chairman and CEO of Barington, in a statement. “We are proud to have served as a catalyst for a number of improvements that the company has recently announced. Our efforts have undoubtedly increased the pressure on the board and management to address the issues we have raised and to deliver actual results to stockholders.”

Barington says it will continue to press Chico's management to reduce its expenses, improve the company's executive-compensation practices, accelerate the growth of its Soma intimate apparel brand and decentralize the company's three brands, including Chico's, Soma and White House | Black Market.

“The company has repeatedly stated that Chico's has an industry leading portfolio of brands that provides a strong platform for profitable growth and value creation,” according to a Barington statement. “We strongly agree and expect Ms. Broader to fulfill her commitment to stockholders to enhance shareholder value.”