Investor's Letter Boosts Dillard's Shares by 8%

Barington Capital wants to meet with the retailer's CEO to discuss ways to improve value.
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Shares of

Dillard's

(DDS) - Get Report

jumped 8% Thursday after an investment firm disclosed that it is pushing for change at the department-store operator.

Barington Capital Group, which owns about a 3.2% stake in the company, said it sent a letter to CEO William Dillard requesting a meeting to discuss ideas to improve shareholder value.

"These would include initiatives that would augment the company's existing operating strategy in areas such as merchandising, inventory management and cost containment, as well as measures to unlock the value of the company's real estate portfolio," the letter said.

A Dillard's representative could not be reached for comment. The news sent shares of the company up $2.78 to $36.71 in recent trading.

Barington's efforts come as the Little Rock, Ark.-based apparel and home furnishings chain has been struggling with inconsistent results. For its most recent quarter, the company posted a 30% drop in profits and a 3.9% decline in sales. Same-store sales, or sales at stores open at least a year, fell 5%.

Any change that Barington hopes to make with the company would have to pass muster with the Dillard family. The company is run by the children of Dillard's founder, William T. Dillard. In addition to CEO William Dillard II, Alex Dillard serves as president, and Mike Dillard and Drue Corbusier serve as executive vice presidents.

The family controls almost 100% of the company's Class B voting shares, which hold the right to elect two-thirds of the 12-member board.

This is just the latest retail-related shake-up that Barington has pursued. The firm, run by corporate agitator James Mitarotonda, has also recently pushed for change at

Warnaco

(WRNC)

,

Pep Boys

(PBY) - Get Report

and

Stride Rite

(SRR)

, among others.