Ann Inc. under pressure to sell
New York – Ann Inc. is being urged to explore options, including a sale, by activist investor Engine Capital and Red Alder. The two firms, who collectively own more than 1% of the outstanding shares of Ann Inc., are publicly urging the company to sell at a substantial premium above current stock price.
In an open letter to the retailer’s board of directors, Engine Capital and Red Alder stated that the company is “deeply undervalued” and could be worth $50 to $55 a share to an acquirer, or a 33- to 46.5% premium to its current stock price.
“Ann is an incredibly suitable candidate for a private equity acquirer because of its consistent performance over the years, ability to further improve margins, significant and growing free cash flow generation,” the letter stated. “A large international retailer could take Ann’s iconic brands and significantly expand their presence internationally at a faster pace.”
According to the letter, Engine Capital and Red Capital have held private discussions with the Ann Inc. board in recent weeks, but did not receive satisfactory results.
“We think the status quo is untenable,” the letter said. “Therefore, we urge the board to retain immediately a nationally recognized investment bank and establish a special committee of independent directors to explore strategic alternatives to maximize shareholder value, including a sale of the company.”
In a public response, Ann Inc. said it “welcomes open communications with its shareholders and values constructive input toward the goal of enhancing shareholder value.” Without specifically addressing the open letter or prospect of a possible sale, the company said it is committed to creating shareholder value and will take actions to position itself for growth and success.
Ann Inc. recently reported earnings of $32.7 million in its fiscal second quarter, down from $35.6 million in second quarter 2013. Its results were in line Wall Street expectations. Looking ahead, the company forecast revenue for the third quarter below Street estimates and also lowered its revenue outlook for fiscal 2014.
ShopYourWay partners with YouTube celebs
Hoffman Estates, Ill. – ShopYourWay, the digital loyalty, marketing and shopping platform of Sears and Kmart, is partnering with YouTube celebrities Ricky Dillon and Jenn McCallister. The two social media stars will serve as “curators of cool” on the Shop Your Way site.
Dillon and McCalister collaborated with Shop Your Way to deliver their first semester fashion picks, creating catalogs members can like, follow and share. They have nearly 10 million fans combined on social media networks such as YouTube, Instagram and Twitter.
Also available on the site is information on how to stay organized throughout the school year, tips to prepare for the colder months ahead, and a how-to guide to help find the right tablet now that classes have started. The site’s social shopping features let members access personal shoppers and crowd-sourced advice, as well as curate their own product pages, rate products, create wish lists, conduct polls, engage with celebrities and more.
"Social shopping enables an entirely new level of involvement and experience as peers can save, share and talk about products," said Eric Jaffe, senior VP, Shop Your Way. "We know it’s important to get the right looks and see what others are wearing, so Shop Your Way has partnered with two teen social media stars as our ‘curators of cool.’"
PacSun is reportedly offering a similar social back-to-school campaign featuring YouTube celebrities.
GlamOn launches automated store at Harrah’s resort
Hollywood, Calif. – Direct-to-consumer cosmetics retailer GlamOn Inc. is operating an automated beauty store at Harrah’s Resort Southern California in Valley Center, California. The store is based on an automated retailing system from AVT Inc.
The system is the first of its kind that provides luxury beauty products, skin care, hair care, grooming items and gifts, from an automated retailing center. The selections are usually only sold in luxury stores, upscale dermatologist offices, and exclusive spas, as well as the GlamOn e-commerce site.