Select Comfort shareholder wants CEO out
Clinton Group also urges other strategic changes
David Perry -- Furniture Today, June 25, 2008
MINNEAPOLIS — A shareholder of Select Comfort is urging the airbed producer and retailer to make some major changes, including finding a new CEO.
But Select Comfort, which reported a $7.1 million net loss on a 22.3% drop in sales in the first quarter, says it is already working on a plan to turn the company around.
The Clinton Group, which holds a 7% stake, said in a letter to the board that the company should replace CEO Bill McLaughlin, revise its marketing strategy to refocus on direct marketing, eliminate underperforming stores, and stop opening stores or making unnecessary capital expenditures until sales improve. It called for several other strategic and operational changes at the company.
The Clinton Group disclosed the letter in a filing this week with the Securities and Exchange Commission. It said it wrote the letter after meeting with McLaughlin on June 16.
“While Select Comfort has taken some limited actions to address certain of these recommendations,” the Clinton Group wrote, “they are not nearly substantial enough to turn around Select Comfort, and nothing we learned at the meeting on June 16 changes our views on the changes needed at Select Comfort. In fact, the meeting on June 16 strengthens our view that aggressive action on our proposed changes should be taken as soon as possible.”
Asked for a response to the Clinton Group’s letter, Select Comfort issued this statement: “The Select Comfort board is actively engaged, and with management, has developed and been executing on a plan to turn the business around in the face of a challenging environment. The board and management already have taken significant actions, and are taking others, that we believe address the company’s near-term issues and deliver value to shareholders.”
