Bath & Body Works reported better-than-expected fourth-quarter sales and earnings but issued weak guidance as it faces a board challenge from an activist investor.
The specialty retailer also said it plans to undertake about 115 total real estate projects in 2023, consisting of about 90 new off-mall stores and 25 remodels to the White Barn store design. The openings will be offset by about 50 mall closures. Bath & Body Works closed 48 mall locations last year, the company said during its earnings call, while opening 95 off-mall outposts.
Daniel Loeb’s Third Point hedge fund plans to launch a proxy fight against Bath & Body Works to address his concerns regarding the board’s oversight of issues that include executive compensation, succession planning, capital allocation, investor communication and strategy for long-term value creation. Third Point, which has an approximate six per cent stake in the specialty retailer, plans to nominate candidates — including a shareholder representative — to the board.
“As fiduciaries, we have no choice but to put forth qualified director candidates and give our fellow shareholders the opportunity to elect directors who can hold the stewards of their capital responsible for the decisions they make,” Third Point Founder and CEO Loeb wrote in a letter to the company’s board. “We believe that our slate will bring a breadth of talent to support long-term growth and sustained share price appreciation at Bath & Body Works.”
