Third Point LLC, which holds a minority stake of 6% in Bath & Body Works Inc., decided to fight a proxy fight against Third Point for paying higher salaries to executives. It also ups the ante against the retailer for poor financial performance.
According to the latest breaking news, Third Point is planning to introduce its nominee to the board of Bath & Body Works at an annual meeting in the spring. A window was opened on February 11, 2023, for nominating candidates to the board. The window for nominations will end on March 13, 2023.
The product line of Bath & Body Works
Columbus, Ohio-based Bath & Body Works is engaged in the sale of sanitizers, body care, soap, and home fragrance products across the US through malls and retail stores. Its market value is around $9.5 billion.
Bath & Body Works reported impressive performance during the pandemic with enhanced consumer spending, However, its growth is sluggish and it posted $1.5 billion in revenues in Q3, a drop of 5% YoY. Its share price has declined to $41 from $76 since 2021. After the move by Third Point, the share price recovered to $41.89 on Wednesday.
According to the findings of an activist, Bath & Body Works paid $18 million to Sarah Nash, an interim executive, for work that lasted less than a year. Ms. Nash is currently working as the chair at Bath & Body Works.
According to a communiqué in 2022, Andrew Meslow, the previous CEO of Bath & Body Works, left the company in May of that year on health issues. Gina Boswell was appointed as CEO in December 2022. The Third Point is concerned with the poor allocation of capital at Bath & Body Works. It also finds fault in the appointment of a less experienced Nash in the beauty and consumer industries as interim CEO at the company and the ill-timed buyback of shares in 2022.
According to Third Point, Ms. Nash previously worked at Novagard Solutions, which is engaged in the production of coatings, silicone sealants, and other products that find use in building systems, as CEO. Bath & Body Works issued a statement claiming that the leadership is focused on creating value for shareholders and considers the feedback of its shareholders regularly. The company’s board disagreed with the points mentioned by Third Point in the letter. Bath & Body Works is making changes to its board. The company roped in the CFO of Hershey Co., Steve Voskuil, as an independent member of its board.
Posts impressive results in Q4
According to information collected from the best news websites in the US, Bath & Body Works has improved its financial performance in Q4. It posted $2.89 billion in net sales in Q4, surpassing Wall Street analysts forecasts. It improved both the bottom and top lines in Q4.
Gina Boswell said the team at Bath & Body Works put in “significant efforts” in delivering the best results in Q4 despite difficult economic conditions in the market. With its loyalty program, the company increased sales during the holiday season, with over 33 million customers responding positively. Bath & Body Works will engage in cost-saving measures and improve operational efficiency. It expects to achieve cost savings of $200 million annually this year.