Shares of the Columbus, Ohio-based company were soaring 11% to $18.44 in trading Friday.
In a 12-page letter addressed to shareholders, Macellum Advisors GP LLC and Ancora Advisors LLCs, which own about 11% of Big Lots stock, said they "have diagnosed a number of the causes that have contributed to the company’s underperformance and believe these issues have been self‐inflicted by the Board."
The two funds nominated nine directors, including former CEO Steven Fishman, which, if all elected, would replace the entire Big Lots board.
"The Investor Group believes that the Board must undergo a significant refreshment to address the Company’s prolonged stock price and operating underperformance," the letter said, "which the Investor Group believes has been largely driven by the Board’s poor operational oversight, ineffective capital allocation strategy and failure to optimize the Company’s balance sheet, including by monetizing the Company’s real estate."
Big Lots was scheduled to host an investor day at the New York Stock Exchange Monday, but the letter said the event was cancelled.
The letter said "shareholders were poised to hear a comprehensive road map to understand the benefits of this strategy."
"Yet, the Board’s decision to allow this meeting to be canceled speaks volumes about their inability to oversee the development of a comprehensive plan to create shareholder value," the letter said.
A company spokesperson didn't mmediately respond to a request for comment.
Last week, Big Lots reported fourth-quarter sales of $1.61 billion, up 0.5% from a year ago. Comparable-store sales decreased 0.9% from a year ago. Net income decreased 13.2% to $93.8 million, declining to $2.39 from $2.68 a share.