“If the company’s argument is this chauvinistic trope that women can’t join the board because they’ve never been on as a director before, then this embarrassing situation in Corporate America will never be remedied,” said O’Malley, managing member of Kenosis Capital, a merchant bank, in an interview with CNBC.
CNBC requested comment from Destination Maternity five times over the course of five days. The company did not return CNBC’s calls or emails but sent shareholders a letter yesterday evening.
After speaking with stockholders during the proxy season, Destination Maternity said that they “reaffirm our commitment to increasing gender diversity at the board level by identifying and appointing at least one additional highly qualified female director to the board as soon as possible.” ISS declined to comment beyond their report.
Shares of Destination Maternity have slumped 75 percent over the last three years amid management upheaval, a failed takeover bid and dwindling mall traffic that has cut into their sales and profitability. The market cap is currently a mere $40 million and the dissident investors say that if a turnaround doesn’t happen quickly, the company wouldn’t have long to survive.
“I’d say a year is generous,” said Marla Ryan, one of the dissident nominees and founder of Lola Advisors, a business consultancy for the apparel, beauty and wellness industry. Prior to her role there, she held senior positions at Lands’ End and J. Crew. “This is a brand that’s been around for such a long time and really has that brand equity and awareness. It shouldn’t go away.”
“But we fear it may,” O’Malley said.
On the dissident slate, Ryan is joined by Holly Alden, the co-founder of Stance, a sock manufacturing company, and of Skullcandy, an audio accessory company, as well as Anne-Charlotte Windal, a retail consultant and former retail equity analyst. Christopher Morgan, a senior retail analyst at the hedge fund Kingdon Capital Management, is the fourth nominee on their slate.