This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Jos A. Bank Clothiers Gets Its Own Activist Investor

NEW YORK ( TheStreet) -- Activist investing is heating up in the retail sector.

Jos. A. Bank Clothiers (JOSB) shares surged11% on Tuesday and hit a new 52-week-high after BeaconLight Capital sent an open letter to its board of directors criticizing the menswear company's corporate governance and compensation practices.

"We are convinced that tremendous value is trapped inside the company due to the absence of a credible capital allocation policy, an insular board of directors, poorly aligned management incentives and the company's refusal to communicate with shareholders," the Aug. 13 letter said.

BeaconLight and its affiliates own more than 1% of Jos. A. Bank's common stock, according to the letter.

"The company's stock could be worth more than $70 per share today, which better reflects the solid business that has been built over the last two decades," the letter said.

The move follows the recent dramatic events that unfolded at J.C. Penney (JCP - Get Report) over the past week, culminating in Bill Ackman's resignation from the department store's board of directors.

Shares of Jos A. Banks surged 11% to $44.73 at last check. Shares of J.C. Penney were falling on Tuesday by 3.4% to $12.72.

"We believe that Jos. A. Bank has a solid long-term foundation, a talented operational management team, and exciting growth prospects. With the right capital allocation, strong corporate governance, better aligned management incentives and more appropriate investor communication, we believe that the company and its shareholders will thrive in the years to come," the letter said.

Jos. A. Bank did not immediately respond to a request for comment.

The issues raised in BeaconLight Capital's letter are a culmination of an increasingly frustrated investor base with the company.

One of the biggest sources of contention has been former CEO and non-executive chairman Robert N. Wildrick's annual $825,000 consulting fee supposedly for services related to finding strategic acquisitions. Wildrick, 68, was the company's chief executive for nine years before handing over the position to R. Neal Black in 2008 to become non-executive chairman.

But still Jos A. Bank has not engaged in any acquisitions, even though it formally announced in June that it was considering "strategic opportunities to enhance shareholder value," which included potential acquisitions and hired investment banking firm Financo.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
JOSB $64.98 -0.05%
JCP $8.91 -1.30%
MW $16.94 -1.11%
AAPL $92.92 -0.75%
FB $117.56 -0.42%


Chart of I:DJI
DOW 17,621.75 -29.51 -0.17%
S&P 500 2,050.03 -1.09 -0.05%
NASDAQ 4,722.6720 -2.9670 -0.06%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs