Highlights Strong and Improving Financial Results – the Company’s Strategy is Working
Urges Shareholders to Vote on the BLUE Proxy Card “FOR” each of Citi Trends’ Highly Qualified and Experienced Directors
The full text of the letter follows:
VOTE FOR ALL OF THE CITI TRENDS DIRECTOR NOMINEES
ON THE BLUE PROXY CARD TODAY
Dear Fellow Stockholders:
The skills and abilities of your incumbent directors, who have successfully designed, implemented and overseen the Company’s current strategic plan, stand in stark contrast with those of the individuals proposed by
Electing Macellum’s nominees puts your
CITI TRENDS’ STRATEGIC PLAN IS DELIVERING STRONG AND IMPROVING FINANCIAL RESULTS
Following the dramatic shifts in the urban apparel landscape that occurred in 2010-2011, your Board responded effectively to a dramatic change in
Against the backdrop of a challenging retail environment, this strategy has enabled
The Company’s most recent sales results illustrate that our improved merchandising strategies are driving better performance, with total sales in the 13-week period ended
“Comps increased 1.0%… reflecting substantial month-to-month improvement, while total sales increased more than 3% to
“Store Checks Suggest Momentum Has Continued So Far in May. We visited nine stores in the
Citi Trends’ strategy is working – having generated a Total Shareholder Return of 99% since 2012 – but it requires careful stewardship by a highly qualified Board and management team. Macellum’s nominees put that stewardship at risk.
ISS HAS RECOMMENDED CITI TRENDS DIRECTOR
While your Board is pleased that the
In its report, ISS said:
- The company’s ability to rebound its share price and recover some operational footing following its 2011 trough levels should not go without credit; and,
Citi Trends’recent gains are correlated with and seem attributable, in part, to a positive earnings surprise announced Mar. 10, 2017as well as the company’s $0.02dividend increase and $25 millionshare buyback authorization announced Apr. 10, 2017.
It is encouraging that ISS notes the recent actions taken by Citi Trends’ Board to enhance stockholder value, and the resulting positive reaction shown by investors. However, this makes it all the more puzzling that ISS simultaneously faults the Company for failing to turn its back on its core customer. The report criticizes the Board for what it sees as a “[failure] to exercise a potentially lucrative option to recalibrate” and for not electing a “different set of strategy and merchandising choices to re-position and protect or expand the off-price side of the business” following the collapse of the urban branded apparel phenomenon. This suggested course of action and the inappropriate ‘peer’ comparisons made by ISS call into question the foundation of the report’s business analysis. It also highlights an apparent lack of understanding of Citi Trends’ unique, underserved core shopping base, predominately lower income African-Americans.
Even if the Board concluded it was prudent to fundamentally change
We are disappointed that the ISS recommendation appears to be based on the assertion that, in the difficult aftermath of the branded urban apparel implosion,
MACELLUM’S NOMINEES OFFER NO NEW RELEVANT EXPERIENCE, SKILLS OR PRESPECTIVE
Compared to Executive Chairman
Mr. Andersonhas in-depth knowledge of Citi Trendsand its target customers, attained from his tenure of more than 11 years as CEO and 15 years as a director. In addition, Mr. Andersonhas more than three decades of relevant executive management experience and a distinguished career of leadership in other companies in our industry.
Mr. Hyatt, a former public company CFO, has advised companies in a range of sectors and has particular knowledge of the retail industry from his senior executive roles at Cracker Barreland Cole National Corporationand service on your Board. Mr. Hyattcurrently serves as the chairman of the Audit Committee.
Ms. Levyis a recently installed independent director, and as an accomplished merchandising executive in the off-price retail industry, she brings a relevant and valuable perspective to the Board. Ms. Levy’s significant experience devising product strategies and ensuring alignment between the overall merchandising function and a company’s strategic direction provides her with a unique understanding of how to enhance Citi Trends’ competiveness.
Your Board is actively engaged in the oversight of the Company’s strategy, which has delivered years of profitability, growth and stability – electing your incumbent directors will allow this strategy and the Company’s forward momentum to continue uninterrupted.
PROTECT THE VALUE OF YOUR INVESTMENT IN CITI TRENDS:
VOTE THE BLUE PROXY CARD TODAY
Your Board is committed to acting in the best interests of all
Your vote is extremely important, no matter how many or how few shares you own. We urge you to vote today by telephone, online or by signing and dating the enclosed BLUE proxy card and returning it in the postage-paid envelope. If you have previously returned a White proxy card you received from Macellum, you have every right to change your vote by using the BLUE proxy card to support the Citi Trends Board. Only your latest dated validly executed proxy card will count. Please do not send back any White proxy cards, even to vote against the Macellum nominees, as doing so may cancel out any votes “FOR” the Citi Trends Board.
If you have any questions or need assistance voting, please call
We are extremely honored to serve on behalf of you, our stockholders. Your Board and management team are committed to acting responsibly and to maximizing the value of your investment. Thank you for your continued support.
Very truly yours,
The Citi Trends Board
All statements other than historical facts contained in this news release, including statements regarding our future financial results and position, business policy and plans, objectives of management for future operations and our intentions and ability to pay dividends and complete any share repurchases, are forward-looking statements that are subject to material risks and uncertainties. The words “believe,” “may,” “could,” “plans,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions, as they relate to
Important Additional Information