ValueVision, Investor Trade Barbs Before Shareholder Vote
The ongoing dispute between Eden Prairie-based ValueVision Media, Inc., and activist investor Clinton Group continues as ValueVision’s annual meeting approaches on Wednesday.
ValueVision and the Clinton Group have butted heads publicly since last fall, when the New York-based investment group requested a special shareholders meeting to discuss its proposal—which it announced in late October—to replace ValueVision CEO Keith Stewart, along with the majority of the company’s directors and board members, who Clinton alleges are mismanaging the company and causing it to “dramatically under-perform” its rivals.
ValueVision has adamantly denied such allegations. The company sells everything from jewelry to consumer electronics to beauty treatments on its website and television channel. It brands itself as “ShopHQ,” a moniker that replaced its well-known “ShopNBC” brand name in May.
In ValueVision’s previous responses to Clinton, the company said that it fully supports its management team, that Clinton’s meeting request letter contained “deficiencies” that require the group to submit a new letter, and that the shareholder group did not hold a “sufficient percentage of the company’s shares” to demand this type of special meeting.
Ahead of Wednesday’s shareholders meeting, The Clinton Group took another jab at ValueVision, calling on the company to assure its vendors and employees that they can exercise their voting rights without “fear or reprisal.” The Clinton Group claims to have heard from “multiple employees and vendors” that are “afraid to vote their shares for us because they fear management will retaliate against them.”
A ValueVision representative declined to comment on Clinton’s most recent demand, although the company has given no indication that those who vote in favor of Clinton Group nominees would be treated any differently than those who don’t.
The Clinton Group made its appeal after three emails, which were sent to Clinton Group President Greg Taxin, were made public Wednesday. The emails appear to have been sent from former ValueVision employee Pamela McCoy and two anonymous current employees.
McCoy wrote in her email that she had been with the shopping network for nearly 20 years and that more than a dozen of her fellow employees had expressed frustrations with the company and shared a “fear of speaking out” because of a concern for their jobs. She wrote that the way employees are treated is “deplorable” and that many department heads are “verbally abusive” and that “the shift in culture at ShopHQ presents itself as corse [sic] and demeaning.” The other two letters reflect some similar sentiments but focus more on the alleged mismanagement of the company at the executive level; read all three letters here.
ValueVision CEO Keith Stewart responded to the letters later on Wednesday with a letter to all of his employees. In it, he wrote that the allegations made by “disgruntled former host and vendor Pam McCoy” are “simply not true and completely unfair.”
Regarding the two anonymous letters, Stewart wrote: “Let me stress that the company has an open-door communication policy with its team members who have every right to be heard. We also have a hotline for team members to raise concerns, and anytime a complaint is brought forward, the company takes it seriously.”
Read Stewart’s full letter here. Learn more about ValueVision and Clinton Group’s back-and-forth conflict here.