Bath & Body Works has averted a proxy fight by appointing a new board member.
The specialty retailer has appointed lawyer and financial executive Thomas J. Kuhn as the board’s new independent member, effective March 10, in a move that has pleased an activist investor,
Bath & Body Works said the appointment was the result of the board’s “continued engagement” with Third Point LLC, which recently recommended Kuhn as an additional candidate for the board.
The appointment comes a little over a week after news broke that Third Point planned to launch a proxy fight against Bath & Body Works to address concerns regarding the board’s oversight of issues that include executive compensation, succession planning, capital allocation, investor communication and strategy for long-term value creation. Third Point, which has an approximate 6% stake in the retailer, said it was planning to nominate candidates — including a shareholder representative — to the board.
In a statement, Third Point CEO Daniel S. Loeb said that “Tom is a trusted strategic advisor whose practical financial and governance insights will be highly additive to the board.”
Third Point has told Bath & Body Works that it no longer intends to nominate candidates to the board at the company’s 2023 annual stockholders meeting.
“The board was impressed with Tom’s background as a strategic advisor to numerous companies and boards of directors,” said board chair Sarah Nash. “We are confident that Tom’s 35-year history as a respected financial and legal advisor, including working with consumer companies, will bring an important perspective to Bath & Body Works as it focuses on its key strategic initiatives to maximize shareholder value.”
Bath & Body Works, which was spun off from L Brands in 2021, reported net income of $428.2 million, or earnings per share of $1.86, for the quarter ended Jan. 29, compared to $592.6 million, or $2.27 per share, in the year-ago period. Adjusted per-share earnings came to $2.30, well ahead of the $1.62 analysts had been expecting.
Net sales fell 5% to $2.889, topping forecasts of $2.807 billion.
Bath & Body Works operates more 1,800 stores in the U.S. and Canada and more than 425 international franchised locations.