Forzani rejects hedge fund’s proxy demands
Forzani Group (FGL.TO) recommended that shareholders oppose plans by Crescendo Partners, a New York-based hedge fund, to nominate its own slate of two directors for election to Forzani’s board of directors.
The Canadian sporting-goods retailer said Crescendo Partners, which owns about 5 percent of the outstanding shares, “failed to provide a compelling rationale to support its demands and failed to identify any particular business initiatives.”
The fund was requesting that it be allowed to appoint two of its own members to the 10-member board.
“Last month Crescendo informed us that it owned 5.1 percent of FGL’s shares, demanded three seats on our board of directors and threatened a proxy fight if we declined,” said John Forzani, chairman of Forzani, in a statement. “Based on a number of factors, the board unanimously determined that the company and its shareholders would be best served by denying Crescendo’s extraordinary demands.”
Forzani also said the plan did not appear to be supported by a large percentage of its shareholders.
Forzani has mailed a Management Proxy Circular with its slate of eight nominees for the company’s board. The election of directors will take place at the company’s Annual General Meeting on June 10.
The company said its understands that Crescendo has issued its own proxy circular and the company will respond to it in due course, after having taken the opportunity to review it.
Forzani and its board are advised by Greenhill & Co., as independent financial advisors, Blake, Cassels & Graydon LLP, as legal counsel and Georgeson Shareholder Communications Inc., as proxy solicitation agent.
The Forzani Group is Canada’s largest national retailer of sporting goods, operating stores such as Sport Chek, Coast Mountain Sports, Sport Mart and Fitness Source, among others.
Nautilus general manager Joyce departs
In a one-sentence filing with the SEC, Nautilus (NYSE: NLS) said Timothy Joyce, the company’s general manager and a senior vice president, had left the company, effective immediately. No other details were provided.
Joyce handled the day-to-day operations for the company following its takeover by Sherborne Investors LP, a New York turnaround firm that secured control of the company’s board during a December 2007 proxy fight.
Last week, the company reported a first-quarter loss of $13.8 million, while sales fell 44.4 percent to $72.1 million.
Sales for Easton-Bell Sports up for Q1
Easton-Bell Sports, parent of Easton, Bell, Giro and Riddell, reported an increase in net sales for the first quarter: $184.8 million versus $182.1 million in the same period the year before.
For the quarter ended April 4, net income came in at $975,000 — significantly lower than the $2.3 million in the same period the year before.
Gross profit was $60.1 million compared to $61.0 million last year. SG&A expenses were $46.8 million versus $43.6 million.
Nike to reduce workforce by 5 percent
Nike (NYSE: NKE) said it will cut 5 percent of its global work force — about 1,750 jobs worldwide — as demand for its products slows as consumers curb spending. The company plans to complete the reductions in the coming weeks.
At its Beaverton, Ore., headquarters, it’s laying off 500 people, but Nike did not specify what departments the cuts would be in.
Nike had announced in February that it would cut jobs as part of a realignment of its business. In March, it said it was reducing layers of management, among other organizational changes.
Wal-Mart reports dip in Q1 sales
Wal-Mart Stores (NYSE: WMT) reported a 0.6-percent drop in first-quarter sales, which were affected by the negative impact of currency exchange rates.
Net sales were $93.471 billion compared to $94.042 billion in the first quarter last year.
Without the negative impact of currency exchange rates, net sales for the quarter increased 4.5 percent to approximately $98.307 billion on a constant currency basis.
Its total same-store sales were 3.7 percent, without fuel, compared to 2 percent the year before.
It reported diluted earnings per share for the first quarter of fiscal year 2010 of $0.77 versus $0.76 last year. Currency exchange rates negatively impacted earnings by $0.04 per share, it said.
–Compiled by Wendy Geister
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