Big Lots has issued a statement in response to Macellum Capital Management and Ancora Advisors, who submitted a notice of nomination of nine director candidates to stand for election to the retailer’s board of directors at the company’s 2020 annual meeting of shareholders.
Big Lots has not yet set a date for the shareholders meeting. In its response, Big Lots stated:
“The Big Lots board of directors and management team are committed to acting in the best interests of the company and its shareholders to create long-term, sustainable value, and we are executing a thoughtful, prudent strategy to meet this objective. Members of the board and senior management team have held multiple discussions with Macellum and Ancora in recent weeks and the company expects to have further such discussions.
Big Lots has a diverse and independent board, with three new directors who have joined in the past three years, including the company’s chief executive officer who was appointed to his role in September 2018. The Big Lots directors bring a combination of strong management backgrounds, public company experience and financial as well as retail and consumer industry expertise that is relevant to the company’s operations. The board believes that it has an appropriate mix of skills, experience and leadership to oversee the execution of the company’s strategy.
As previously communicated, over the past year, Big Lots has been executing on a transformational strategic roadmap– Operation North Star– to enhance performance and drive shareholder value. Operation North Star focuses on three key areas: driving topline growth through multiple tested and proven initiatives, funding the journey through significant expense reductions, and ensuring that the company has the systems, team and infrastructure in place to be a high-performing organization. Big Lots made meaningful progress in executing initiatives under its strategy throughout fiscal 2019, supporting the delivery of positive comparable sales for the full fiscal year. The company also returned a total of $98 million to shareholders in fiscal 2019 through dividends and share repurchases.
The board and management team routinely evaluate all alternatives available to create value for shareholders. The company completed a sale of one of its distribution centers in November 2019 and continues to evaluate additional similar opportunities to unlock value from its real estate assets, including sale and leaseback opportunities.
Looking ahead, the company is evolving and optimizing its growth initiatives, and will continue to focus on allocating capital to the highest return opportunities that clearly and significantly exceed its cost of capital. As a result, Big Lots has reduced its expected full year 2020 capital expenditures to $160 million to $170 million from its initial estimate of $200 million. The company is also maintaining a strict focus on cost controls and a culture of prudent spending across the organization. Based on actions underway, the company expects to exceed its prior $100 million cost reduction target and expects to deliver on this commitment by the end of 2020, one year ahead of its original plan. While the company is actively addressing a number of near-term headwinds, the board and management remain confident that Operation North Star will deliver sustainable improvements in the company’s performance, and expect these to become more evident as the year progresses.
The Big Lots board and management team are focused on delivering on the company’s commitments to all of its stakeholders, including driving value for our shareholders.”
Big Lots added that its board would review and consider Macellum’s and Ancora’s candidates to assess their ability to benefit all shareholders.
On March 6, Macellum Advisors and Ancora Advisors announced that they had issued an open letter to Big Lots shareholders announcing their board nominees: Theresa Backes, Suzanne Biszantz, Andrew Clarke, Lynne Coté, Jonathan Duskin, Steven Fishman, Aaron Goldstein, Jeremy Liebowitz and Cynthia Murray.
Macellum and Ancora, together, own about 11% of Big Lots outstanding shares.