Discount retailer The Works is facing a boardroom dispute after activist investor Kelso pushed to appoint former Card Factory director Graeme Coulthard to its board.
The Works has objected to the proposal by Kelso, which owns 10 per cent of the company, and has urged shareholders to vote against the resolution.
Board members at The Works argued that Coulthard has "limited experience" as a director of a listed company. They cautioned that his presence could be a distraction to bosses.
Kelso hit back on Friday, saying it was "surprised and disappointed" by the push-back from The Works. The investor said the board's remarks about Coulthard lacking experience are "misleading."
Coulthard himself owns 8 per cent of the retailer. Kelso argued that his time on the board of Card Factory means he is well-placed to serve at The Works, highlighting his "direct experience of multi-site value retail."
The Works is a British value retailer operating nationwide stores that sell books, stationery, toys, and craft materials. Card Factory is a major UK competitor specializing in low-cost greeting cards and gifts. Multi-site value retail refers to retail chains operating numerous physical stores selling budget consumer products.
Shareholder Opposition And Executive Strategy
Addressing the board's stance, Kelso rejected management claims regarding Coulthard's potential impact on the business. The firm added: "The idea as set out in the Board's baseless comment that Mr Coulthard will undermine value creation rather than enhance it, in Kelso's view, is simply absurd."
Activist shareholders frequently acquire ownership stakes in public companies to lobby management for strategic adjustments, board seats, or operational overhauls aimed at increasing shareholder returns.
The dispute comes as chief executive Gavin Peck continues driving a turnaround plan to revive sales at The Works. His strategy includes shutting down website sales to focus on physical stores while selling books and toys popular on social media.
Market Impact And Corporate Outlook
News of the corporate row sent shares in The Works down 5 per cent. However, the stock has performed strongly overall this year, rising around 150 per cent over the period so far.
Dan Coatsworth, head of markets at investment platform AJ Bell, said that "the matter is far from over, effectively setting the scene for another boardroom battle among UK plc."
AJ Bell is a major UK financial services firm providing investment platform services. The term UK plc refers collectively to publicly listed companies operating across the United Kingdom market.
Shareholder votes on board appointments at British listed companies allow investors to decide whether to back incumbent management or support activist candidates seeking corporate change.
