By Svea Herbst-Bayliss
BOSTON (Reuters) - Activist investor Legion Partners Asset Management LLC has nominated seven directors to sit on specialty retailer Genesco (NYSE:GCO) Inc's eight-person board, according to a letter made public in a filing on Monday.
Legion, run by Christopher Kiper, wants Genesco to consider selling non-core assets and buy back shares. It owns a 5.6% stake in the retailer, which has a market capitalization of $727.8 million. Genesco's stock price inched up 1.3% to $49.29.
"We will review the letter from Legion, along with their proposed director candidates, and respond in due course," Genesco said in a statement.
With Legion's board nominees, "Genesco will be able to produce $7.50 in earnings per share ("EPS") by fiscal 2023 and see its stock double from current levels," Kiper and Legion Managing Director Ted White wrote in a letter to other shareholders. The pair said they wish to keep Genesco's CEO, Mimi Vaughn, saying their nominees want to partner with her and "draw on her institutional knowledge to implement a strategic plan."
Legion blamed Genesco's "poor performance" on its plan to operate as "a retail conglomerate holding company and think of itself as a private equity investment platform," the letter said, citing its decision to enter the hat business, buy a European footwear retailer and spend $34 million on a licensing business.
Legion has previously launched campaigns at other retailers including Bed Bath & Beyond Inc (NASDAQ:BBBY), and this year it teamed up with several other activists to take control of department store Kohl's (NYSE:KSS) board.
This is the second time that Legion has tangled with Genesco. The hedge fund's seven board nominees include Marjorie Bowen, who served as an independent director from 2018-2019.
Genesco said it disagrees with many of the hedge fund's points and is surprised at the board nomination decision after "not responding to our repeated requests for their input and ideas or sharing their proposed candidates in advance."