Engaged Capital nominates five board members for Abercrombie & Fitch
Newport Beach, Calif. — Engaged Capital, an investment firm specializing in small and mid-cap North American equities and stockholder of Abercrombie & Fitch Co., has named five nominees for the Abercrombie & Fitch board of directors. The nominees are Alexander P. Brick, former CEO of Specialty Retail Group; Robert D. Huth, former CEO of David’s Bridal; Michael W. Kramer, former COO of J.C. Penney; Diane L. Neal, former CEO of Bath & Body Works; and Glenn W. Welling, CIO and managing member of Engaged Capital.
In a statement, Engaged Capital said Abercrombie incumbent directors have a record of wasteful capital spending and blatant disregard for stockholders. The statement specifically cites the recent contract extension of CEO Michael Jeffries, despite Engaged Capital sending a letter to the board asking that he be replaced and without speaking with any major stockholders.
“We need a board of independent leaders who can set a new direction for Abercrombie,” said Welling. “For far too long, stockholders have suffered under the failed leadership of a board that has lacked the independence necessary to properly act as our fiduciaries.”
Gap to raise minimum wage to $10 for U.S. employees
San Francisco – Gap Inc. will raise the minimum hourly wage for all U.S. employees to $9 in 2014, and then raise it again, to $10, in 2015. The move will affect about 65,000 store employees across the company’s brands, which include Gap, Banana Republic, Old Navy, Piperlime, Athleta, and Intermix. Gap’s announcement comes amid a nationwide debate about the minimum wage.
Gap chairman and CEO Glenn Murphy publicly announced the change in a brief blog post. He said employees had been notified in a company phone call early in the morning of Feb. 19.
“To us, this is not a political issue,” Murphy said in the blog post. “Our decision to invest in frontline employees will directly support our business, and is one that we expect to deliver a return many times over. The people in our company who engage directly with our customers carry an incredible responsibility. Our success is a result of their hard work, love of fashion and commitment. We hope this decision provides them with some additional support as they grow their careers with Gap Inc."
In explaining the wage increases, Murphy told employees: “We work for a company with a strong set of values, which can be directly linked to our founders, Doris and Don Fisher. They invented specialty apparel retail, but Don also challenged us to live up to our promise to ‘do more than sell clothes.’ ”
Gap is based in San Francisco, which has a $10.74 citywide minimum wage. California has passed a law that establishes a minimum wage of $10 an hour by 2016.
President Barack Obama publicly praised Gap for the move.
"I applaud Gap for announcing that they intend to raise wages for their employees beginning this year," said Obama.
He also urged Congress to pass a bill that would raise the nation’s minimum wage to $10.10 an hour from the current $7.25 an hour.
It’s time to pass that bill and give America a raise,” the president said.
Facebook acquires m-messaging company WhatsApp for $16 billion
Menlo Park, Calif. — Facebook has reached an agreement to acquire WhatsApp, a cross-platform mobile messaging company, for a total of approximately $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest during four years subsequent to closing.
WhatsApp has 450 million monthly users and adds about 1 million new users per day. WhatsApp’s brand will be maintained; its headquarters will remain in Mountain View, Calif.; co-founder and CEO Jan Koum will join Facebook’s board of directors; and WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications.
Facebook said in a statement that the acquisition supports Facebook and WhatsApp’s shared mission to deliver core Internet services efficiently and affordably, and that the combination will help accelerate growth and user engagement across both companies.
Facebook purchases WhatsApp following a failed effort to purchase visual messaging service Snapchat for $3 billion. However, WhatsApp has been around five years as opposed to two years for Snapchat, and added 100 million new users in fourth quarter 2013. The company sends text messages over WiFi Internet instead of cellular networks. The WhatsApp app is free to download and use for the first 12 months, then costs 99 cents.
"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Mark Zuckerberg, Facebook founder and CEO. "I’ve known Jan for a long time and I’m excited to partner with him and his team to make the world more open and connected."