Activists ask Syms to closet delisting plan

Two activist investors on Wednesday launched a campaign to stop Syms Corp., a New York discount clothing retailer, to reconsider its decision to delist from the New York Stock Exchange.
Barington Capital Group and Esopus Creek Advisors, who together own 9.7% of Syms, sent a letter to Syms' board expressing their displeasure with the company's decision to deregister. "The group believes that such actions will destroy shareholder value," Barington and Esopus Creek wrote in the letter that was attached to a Schedule 13D filing with the Securities and Exchange Commission.
In its statement, Syms argues that investors will be able to buy and sell stock on the pink sheets, maintaining a sufficient level of liquidity and the deregistration will save the company $750,000. "The company estimates that the savings in both direct and indirect costs associated with deregistration will be substantial on an ongoing basis and that the direct recurring annual savings will exceed $750,000," Syms wrote in a Dec. 21 press release. "The company also expects that management will be able to better focus its attention and resources on continuing to improve operations and enhancing shareholder value."
But investors following the company contend that the real reason why Syms wants to deregister is to lower the value of the stock price so that management, including store founder Sy Sims, 81, could complete a management-led buyout at an inexpensive valuation leaving shareholders with lost value.
"It appears that the Syms family does not believe that their company's motto 'An educated consumer is our best customer' should apply to its investors as well," stated a large investor that requested anonymity. - Ron Orol
See Schedule 13D filing via the SEC's Edgar See press release via Yahoo! Finance
Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World.