Bath & Body Works named a veteran consumer products executive as a new director on Monday as the specialty retailer faces pressure from hedge fund Third Point LLC to cut costs and refresh its board.
Lucy Brady, a senior executive at Conagra Brands, expands the board to 11 from 10 members. She had spearheaded digital consumer engagement at McDonald’s and led the global consumer practice at The Boston Consulting Group.
Bath & Body Works Chair Sarah Nash said Brady would bring “expertise in global digital strategy and customer loyalty and engagement.”
The stock traded largely unchanged after the announcement.
The appointment comes weeks after Third Point, which owns a 6% stake in the company, hinted it might push for board seats. Last week, Third Point founder Daniel Loeb told his fund investors in a letter seen by Reuters that he was closely watching the company and its new chief executive.
In December Third Point announced its stake in a regulatory filing and criticized the company’s high costs, including generous executive pay. Third Point declined to comment on Monday.
Last week Loeb called the appointment of Chief Executive Gina Boswell, a former Unilever executive, in December “an encouraging first step.” But he also said hard work lay ahead and that the stock price could climb if executives get the core business back on track.
Bath & Body Works, best known for selling soaps, candles and lotions, is valued at $10 billion.
“The real prize, however, would be if Ms. Boswell can seize on the potential to transform the business from a largely US retailer of soaps, lotions, fragrances, and candles into a more global direct-to-consumer home and personal care brand,” Loeb’s letter said.
Third Point spent an average of $38.16 per share on the stock which is now trading at $44.48. The period for nominating directors opened on Friday.
Third Point has called for board changes at other companies and settled with Walt Disney on a new director late last year. Third Point in 2018 ran a board challenge at Campbell Soup, leading to a settlement days before investors were scheduled to vote on who would sit on the board.
Companies often try to stymie activists’ plans by refreshing the board and addressing some of the criticisms investors might use to persuade others to back them.
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