Deckers Brands, parent company to brands like Ugg, Teva and Hoka One One, confirmed Wednesday that the company received director nominations from Marcato Capital Management, a San Francisco-based investment manager.
Marcato Capital Management, which manages funds that beneficially own around 6.1% of Deckers’ shares, nominated 10 director candidates to stand for election to the Deckers Brands’ Board of Directors at Deckers’ 2017 Annual Meeting of Stockholders, scheduled for Dec. 15.
“Deckers has enjoyed a strong, profitable brand with Ugg for many years, yet has failed to translate this enviable position into growth in earnings and shareholder value. Given the Company’s significant underperformance compared to peers, coupled with the Board’s failure to take the necessary corrective strategic action, we believe change is required,” said Mick McGuire, managing partner of Marcato. “On numerous occasions we have sought to engage constructively with the Board to add new directors and develop a strategy focused on profitable growth while improving margins and returns on invested capital. Unfortunately, our efforts to work collaboratively to enhance shareholder value have been met with significant resistance.”
Meanwhile, Deckers Brands released a statement including the follow excerpt:
Deckers welcomes open communications with its stockholders and values constructive input toward the shared goal of enhancing stockholder value. Although we engage regularly with our stockholders, it is Deckers’ policy not to comment on discussions with individual stockholders. However, it is important to note that members of the Board and senior management team have held a number of discussions with Marcato during the past eight months and those discussions remain ongoing. Deckers has a strong and independent Board, with three new directors who have joined since 2014. The Board believes that it has an appropriate mix of skills, experience and leadership to drive performance and provide effective oversight. At the same time, the Board will give full and fair consideration to the nominees proposed by Marcato.
The Marcato-nominated directors include previous Senior VP and CMO of L.L. Bean Steve Duller, previous Michael Kors executive Anne Waterman and Robert D. Huth, previous CEO and president of David’s Bridal.
Despite a tumultuous sales performance over the last year for the company, Deckers Brands upped its performance last quarter with an increase in sales of 20 percent, giving investors a glimmer of hope.
Deckers representatives said they have no additional comments on the matter.