New York City Two activist investors in Dillard's Inc. are seeking the ouster of its family-led management, including chief executive William Dillard II, over the department store operator's consistently poor results, Reuters reported.
In an Oct. 24 letter to the U.S. Securities and Exchange Commission released on Monday, hedge funds Barington Capital Group LP and Clinton Group Inc. ask Dillard's to immediately search for a new CEO and replace other Dillard family members, saying they are "on the company's payroll regardless of their performance."
"In our opinion, a management team with a comparable record of poor performance at any other company would have been fired long ago," the letter states.
The hedge funds said most of the Dillard family members who work for the company are "overpaid and under-qualified for the positions they hold and can be readily replaced with more talented retailers."
Dillard's has seen its financial results steadily weaken. Dillard's September same-store sales of $568.5 million were down 12%, 3% of which it attributed to hurricane disruptions.
Dillard's avoided a proxy fight with the two funds in April by agreeing to nominate four candidates to the board of directors. All the candidates had retail experience.