The New York hedge funds, which combine for a roughly 5% share in the Little Rock, Ark.-based retailer, in their long running mission to help "heal" the company and protect their investment, are hoping to peak behind the curtain and examine corporate records, books, and board and management meeting minutes involving everything from executive compensation to decisions to retain top poor-performing top brass to the nature of Dillard's business relationships with its independent directors to executives' use of corporate jets, vacation property and other recreational perks.
Barington chairman and CEO James Mitarotonda and Clinton chairman and CEO George Hall in a Monday letter to Dillard's attached to a 13D filing demanded to view corporate records in an effort to evaluate the companies corporate governance and give shareholders more transparency.
Dillard's has been hurting for some time. The company widened its year-over-year losses in the past two consecutive quarters, and sales have also been on the downslide.
The hedge funds have been something of an unwelcome pen pal of Dillard's of late.
- In an Oct. 24 letter, Hall and Mitarotonda sought to oust Dillard's chairman and CEO William Dillard II, as well as family members president Alex Dillard, executive vice president Michael Dillard, executive vice president Drue Corbusier, vice president Denise Mahaffy and vice president William Dillard III, noting that management's compensation has not reflected the company's poor financial performance.
- In a Sept. 25 letter, the pair of hedge funds pushed the board to repurchase all of its outstanding Class B shares and leave the company with one class of stock. The funds argued that the right of Class B shareholders to elect two-thirds of the board puts all of the power in Dillard's senior executives' hands (the Dillard family).
Despite the hedge funds' cries, Dillard's dual-class structure still stands, and the Dillard family remains firmly in place.
The hedge funds' have not always taken aim at the Dillard family. In a letter from Barington to Dillard's chief executive in late June, the fund expressed interest in discussing ways to improve profitability in merchandising, inventory management and cost containment, as well as measures to unlock the value of the real estate portfolio. - Michael Rudnick
Michael Rudnick is The Deal's senior writer covering hedge funds.
Comments
Regional department store chain Dillard's Inc. keeps bleeding, and activist hedge funds Barington Capital Group LP and Clinton Group Inc. keep trying to stitch the wound. The investors appear to believe it may be self-inflicted by management and the board. 
To the Author:
The word "Peak" means climax or top
Article sould have probaly used the word PEEK (glance/examine/quick look)