Carter's Inc. Closes 100 Stores, Adopts 'Poison Pill' as Hedge Fund Buys 17% Stake
Jimmy Carter's, Inc. has announced a cost-cutting plan, including the closure of around 100 stores as leases expire. This move comes amidst a turnaround effort led by a new CEO, following a challenging period since the pandemic. Notably, hedge fund Roseman Wagner Wealth Management, led by Jeffrey Paul Wagner, has acquired nearly 17% of Carter's shares, making it the retailer's largest shareholder.
Carter's, Inc. has been grappling with a decline in comparable sales since 2019, prompting the board to adopt a shareholder rights plan, or 'poison pill', to deter unwanted takeovers. The company will issue one preferred share purchase right for each outstanding share to its stockholders of record. This move follows the significant stock accumulation by Roseman Wagner Wealth Management, which acquired nearly 17% of Carter's shares without prior notice. Carter's, Inc. has not engaged in communication with the firm.
The retailer's turnaround plan, unveiled in May, is aimed at improving its financial health. The plan includes store closures and other cost-cutting measures, with around 100 stores expected to shut down as leases expire. This move is part of a broader effort to streamline operations and enhance profitability.
Carter's, Inc. is taking proactive steps to address its financial challenges, including store closures and the adoption of a shareholder rights plan. Meanwhile, Roseman Wagner Wealth Management's significant investment in the company raises questions about its intentions. Carter's, Inc. has not engaged with the hedge fund and has not provided advance notice of its stock accumulation.
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