Bidder seeks to nab clothier, not to oust CEO

Article by: JANET MOORE , Star Tribune
Updated: July 27, 2012 - 9:03 PM

Aria Partners blasts Christopher & Banks for seeking a new leader amid turnaround.

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A Christopher & Banks store in Moosic, Pa. A hedge fund making a takeover bid for the clothier has backed CEO Joel Waller but criticized the chairman and one director.

Photo: Brandon L. Jones, Dml -

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A hedge fund that has lodged an unsolicited bid for Christopher & Banks has slammed the retailer for seeking a new CEO at the same time it touts the success of its current turnaround strategy.

Aria Partners, which offered $64 million for the Plymouth-based retailer, called it "ironic" that Christopher & Banks released positive data earlier this week when it is also interviewing candidates to replace CEO Joel Waller -- a veteran retailer who became CEO in February.

"As we have said many times, we think Joel is a talented executive who will do a good job managing this business," Aria Partners wrote in a statement. "So good, that we'd like to own the entire company."

Based in Boston and Los Angeles, Aria Partners already owns a 4 percent stake in Christopher & Banks, which has been struggling in recent years, and has previously invested in Kenneth Cole, Barnes & Noble and Wet Seal. Earlier this month, Christopher & Banks rebuffed the firm's buyout offer, saying it preferred to stay the course with its current strategy.

Typically, when an unwelcome buyer tenders a bid for a struggling business, the existing management team is the target of rebuke. Instead, Aria has trained a critical eye on the company's non-executive chairman, Paul Snyder, and a longtime member of the board, Anne Jones.

"The chairman and lead director will do anything to avoid success, and will stop at nothing to keep their exorbitant fees intact while overseeing massive losses for the company," Aria said in its statement.

Snyder, who retired from the global accounting firm KPMG in 2009 after 39 years, has been a Christopher & Banks board member since 2010 and chairman since January. Jones, who has served on the board since January 2000, runs an organizational and strategic consulting firm called Jones Consulting Group, as well as the Jones Family Foundation, both located in Red Wing.

Neither Snyder nor Jones returned phone calls for comment on Friday.

Christopher & Banks, which has about 653 stores nationwide, including 44 in Minnesota, sells casual apparel to women ages 40 to 60.

On Friday, the company's Chief Finanical Officer Peter Michielutti declined to comment on Aria's most-recent missive. However, a presentation to investors and analysts earlier this week indicated that the company has retained an unidentified executive recruitment firm to help identify a "long-term CEO."

In the meantime, Waller, 72, is establishing the "framework of the company's merchandise, marketing and operational strategy," the presentation said. Waller does not serve on Christopher & Banks' board.

Waller previously led teen retailer Wet Seal Inc. from 2005 to 2008. Prior to that, he was CEO of Twin Cities-based Wilsons Leather for 20 years. He did not respond to a phone message on Friday.

On Wednesday, Christopher & Banks released some financial data that indicated positive trends in sales, inventory, its cash position and gross margins for the second fiscal quarter ending Saturday. Full results from the quarter are expected Aug. 29.

In a statement, Waller said in a statement that early indications show the company's turnaround strategy is working. "Our initiatives are gaining traction," he said.

Janet Moore • 612-673-7752