Activist investor Third Level desires to appoint candidates to Tub & Physique Works board


Activist investor Third Level LLC on Wednesday laid out a plan to appoint candidates — together with a shareholder consultant — to the board of Tub & Physique Works Inc., saying shareholders “urgently want illustration” on grounds that government pay was too excessive and financials have been too weak.

The Wall Avenue Journal reported the information earlier within the day. The funding agency introduced the plans after it boosted its stake within the firm throughout the fourth quarter. Third Level has a greater than 6% stake in Tub & Physique Works

The corporate didn’t instantly reply to a request for remark. Shares of Tub & Physique Works rose 2.7% on Wednesday.

In a letter to the board of the corporate — which sells cleaning soap, air fresheners, body-care objects and different wellness merchandise — Third Level Chief Government Daniel Loeb stated the decision for higher shareholder illustration got here after discussions on tips on how to enhance the corporate “stalled” and indicators of resistance to a shareholder consultant grew.

He additionally stated Tub & Physique Works didn’t acknowledge Third Level’s function in suggesting the appointment of Lucy Brady — who’s president of grocery and snacks at Conagra Manufacturers Inc.
— as an unbiased director. And he stated board chair Sarah Nash gave “unconvincing explanations” for rejecting a second candidate, one other shareholder, who was put ahead by Third Level.

Loeb additionally criticized the roughly $18 million that Nash obtained for taking over a brand new function as government chair and interim chief government final yr, calling the interim CEO stint “part-time” work.

“That fee got here on prime of the $700,000 she was already receiving yearly to function Board Chair,” Loeb stated. “Ms. Nash’s exorbitant compensation is much more exceptional when in comparison with her counterpart on the Firm’s closest and far bigger competitor, Ulta Magnificence, which paid its Chief Government Officer roughly $8.9 million in 2022.

“Ms. Nash’s outsized pay package deal is a pink flag for shareholders and alerts an enormous governance failure,” Loeb continued.

Gina Boswell is the corporate’s present chief government.

Tub & Physique Works’ inventory has fallen as Wall Avenue grows extra involved concerning the affect of inflation on issues clients need to purchase — just like the self-care merchandise offered by the chain — and the issues they should purchase. Nevertheless, the retail chain in November boosted its full-year revenue outlook.

Loeb additionally criticized what he stated was Nash’s inexperience in retail and stated her function as chief government at one other firm raised questions on her dedication to Tub & Physique Works. The corporate’s separation from Victoria’s Secret in 2021, adopted by a CEO departure in 2022, led to stumbles in efficiency and in managing buyers’ expectations, he added, resulting in “sloppy execution” on a share-buyback plan.

“[Bath & Body Works] purchased again $1.3 billion of inventory at a median value of almost $50 earlier than a number of cuts in earnings steering despatched the inventory as little as $25,” Loeb stated.

Tub & Physique Works shares are down 18.2% over the previous 12 months. By comparability, the S&P 500
is down 7.4% over that interval.


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