Hedge Funds Report Stake in Dillard’s
New York, Dillard’s Inc. shares on Tuesday afternoon rose 3.4% after two New York-based hedge funds reported a stake in the department store company, saying Dillard’s shares are significantly undervalued.
Barington Capital Group and Clinton Group, which together accumulated a stake of approximately 5.3% in Dillard’s, also sent a letter dated Tuesday to the Little Rock, Ark.-based company’s board outlining recommendations for strategic and operational improvements.
“If the company were more effectively managed, it would be worth substantially more than its current stock price,” the letter from the investment group said. “The vast value potential of the company is not being realized. Dillard’s is an undervalued asset with tremendous opportunity for improvement.
The investment group proposed that the retailer reduce its cost base—including better buying—tighten its assortment of offerings and vendors, and update its private-label merchandise that will set it apart from its department store peers, the group said.
“The disappointing financial performance of Dillard’s must be addressed,” the letter said. “While we acknowledge that the market conditions in the department store sector have been challenging over the past few quarters due to concerns with a weakening U.S. economy, the magnitude of Dillard’s recent weak results cannot be attributed to the economy alone.”
The letter also said Barington has tried to reach out to Dillard’s board and chief executive William Dillard II several times during the past six months, though it said that hasn’t been met with any response from the company.
Wakefern expands private label program
EAST RUTHERFORD, N.J. Wakefern has expanded its operation to provide private label products to retailers outside of its ShopRite system and may begin offering a range of services as well.
The co-op, which is taking on distributor-oriented operations in the wake of Supervalu’s retail expansion, has developed a wide range of support services for the ShopRite supermarkets – ranging from single-unit operators to local chains – and Joseph Colalillo, Wakefern chairman and ceo, said those may become available to supermarket operators if the product initiative proves successful. Colalillo addressed the issue at a networking reception sponsored by the Network of Executive Women’s New York Metro Regional Group.
Amazon MP3 to launch internationally
SEATTLE Amazon.com is taking its digital music store beyond the U.S. this year.
The company announced Sunday that it will begin an international rollout of Amazon MP3, its DRM-free MP3 digital music store, in 2008. The store launched in September 2007 in the United States, and grew to include more than 3.3 million songs from more than 270,000 artists, and can be listened to on any hardware device.
“We have received thousands of e-mails from Amazon customers around the world asking us when we will make Amazon MP3 available outside of the U.S. They can’t wait to choose from the biggest selection of high-quality, low-priced DRM-free MP3 music downloads which play on virtually any music device they own today or will own in the future,” said Bill Carr, Amazon.com vp of digital music. “We are excited to tell those customers today that Amazon MP3 is going international this year.”
The company is not disclosing a specific launch timeline for individual Amazon international Web sites.