Perry Ellis International reported a 62 percent increase in total shareholder returns last year and made several changes in corporate governance, the company told investors in a letter issued this week.
But that might not be enough to stop a proxy fight over the Doral-based apparel company, which has faced withering criticism from an activist investor group.
In the letter, Perry Ellis said it had posted a 38 percent increase in year-over-year e-commerce revenue in the third quarter of fiscal year 2015, which ended Nov. 1, and that its net sales in Europe rose by 20 percent.
The company also highlighted the appointment of three independent directors to its board, as well as other governance changes, including a policy requiring outside directors and executive officers to own shares in the company worth at least three times their base salary or as much as their annual retainer.
Another new rule restricts directors and top executives from hedging company stock.
But Chris Kiper, managing director at California-based Legion Partners, said that while the revenue figures were encouraging, the governance reforms fell far short of what is needed. Kiper has previously been critical of the company.
“They’re trying to whitewash their history of really poor governance practices by making a few quick fixes,” Kiper said.
He said Legion could initiate a proxy fight over the company in the next few weeks. That would mean nominating its own candidates for the board’s three open spots at the next annual meeting, which is likely to take place in June, Kiper said.
Together with the California State Teachers’ Retirement System, Legion owns about 6 percent of the company’s stock.
Legion wants Perry Ellis to institute further changes, such as reducing directors’ terms from three years to one and separating the roles of chairman and CEO George Feldenkreis into two separate jobs.
Feldenkreis bought the well-known American fashion house in 1999.
The company earns about $900 million in revenue from annual domestic and international sales and employs more than 5,000 people, including 500 in Doral.
“Over the course of the fiscal year, we made significant progress in positioning your Company for long-term growth and success,” Feldenkreis wrote in the letter to investors. He also said the company planned to drive growth by shedding unprofitable brands, increasing international revenue and making more direct-to-consumer sales through the Internet.
The new board members are Jane DeFlorio, former managing director at Deutsche Bank Securities for retail; J. David Scheiner, who retired as president of Macy’s Florida and Puerto Rico division in 2009; and Alexandra Wilson, the co-founder of Gilt, an online retailer.