Pier 1 Imports’ largest shareholder has made a bunch of quick money as its stock price zoomed up in recent weeks. But it’s not going away.
In a new letter to directors penned following last week’s strong earnings report, Alden Global Capital said it still wants representation on the board and a say in who becomes the Fort Worth-based company’s next chief executive officer.
“We continue to believe that shareholder representation is required on the Board of Directors,” wrote Alden’s president Heath Freeman. “The recent performance, while gratifying, does not address the need for improved governance and a disciplined focus on operational improvements.”
Last week, the home furnishings retailer reported net income of $13.6 million for the three months ended Nov. 26, following losses in the first half of the year, and a boost in comparable-store sales. It also raised its full-year guidance.
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The stock (ticker: PIR) took off, rising nearly 50 percent in a week. It gained 48 cents on Tuesday to close at $9.49.
Alden, a New York hedge fund which has bought up troubled newspaper companies in recent years, disclosed a 9.5 percent stake in Pier 1 in September and later threatened a board fight. The company said it had acquired 7.9 million shares at prices ranging from $3.86 to $4.16 a share.
The investor letter said Alden wants to be involved in the CEO search and executive compensation decisions. “Unfortunately, to date the board has show little desire or interest in working constructively with your largest shareholder. We therefore encourage you to reeevaluate your dismissive approach,” the letter states. The letter was included in a SEC filing in which Alden disclosed it now owns 7.6 million shares, or 9.2 percent of the stock.
Pier 1 announced last week that its chairman, Terry London, will take over as interim CEO starting Jan. 1 as the board continues to search for a permanent successor to outoing boss Alex Smith.