Activsts vs. Charming Shoppes: So Far, it looks like a Tie

A duo of activist investors seem to be having mixed luck with their efforts to press for changes at Charming Shoppes Inc., a Bensalem-based multi-brand retailer of women's plus-size apparel.

Hedge funds Crescendo Partners and Myca Partners have launched a proxy contest to install three director candidates on the company’s board at its May 8th scheduled annual meeting. But influential proxy advisory services company Glass Lewis & Co. only recommended one of the dissident duo’s slate, Michael Appel. The proxy advisory services company did not recommend institutional investors vote for Crescendo director Arnaud Ajdler and Myca official Robert Franfurt.

(A split recommendation is a favorite tool for the proxy advisory service firms in cases where they don’t want to appear too supportive of the dissidents or the management-backed incumbents)

Even so, Appel’s presence will likely help advance the share-value improvement goals of Crescendo and Myca. Appel’s experience as a retail-focused managing director at Quest Turnaround Advisors would likely bring a deal-oriented focus to Charming Shoppes. Though, company officials complain that his lack of experience as a director or in the apparel industry make him a bad candidate. Too bad for Charming Shoppes.

Also, largely in response to the activists, Charming Shoppes announced Friday it has retained Banc of America Securities and Lehman Brothers as financial advisors to assist the company in looking into “strategic alternatives” such as selling its “non-core misses apparel catalog titles in order to provide a greater focus on its core brands, Lane Bryant, Catherines and Fashion Bug, and to enhance shareholder value.”

That kind of restructuring is exactly the kind of thing activists are looking for. Even if Crescendo and Myca don’t get all three of their candidates on the company’s board, they can always come back next year with additional nominees. -- Ron Orol