(Reuters) - Jos A Bank Clothiers Inc JOSB.O came under fire from investment manager BeaconLight Capital LLC who demanded the men’s apparel retailer returns cash to investors and reorganizes its board.
Shares of Jos A Bank Clothiers closed up nearly 13 percent at $45.33 on the Nasdaq on Tuesday.
BeaconLight, which holds more than 1 percent stake in Jos A Bank, said the company’s stock was the cheapest among U.S.-listed retailers and shareholders were losing patience with the company which has never paid dividend or repurchased shares.
“We believe that the (Jos A Bank) stock should be worth $70 per share even at a discounted multiple to its peers,” BeaconLight said in a letter to the retailer on Tuesday.
The investor demanded Jos A Bank immediately return all of its cash to shareholders, preferably through buybacks. The company’s cash and cash equivalent and short-term investments totaled about $377 million.
Jos A Bank, which owns more than 600 stores, said in June that it was looking at potential acquisitions but has not set a timeline.
BeaconLight also urged Jos A Bank to “add a significant number of truly independent directors.” All board members currently were connected to the company or Chairman Robert Wildrick, the investor said.
Jos A Bank’s chief financial officer was not immediately available for comment.
BeaconLight’s letter comes at a time when activist investor William Ackman stepped down from J.C. Penney Co Inc’s (JCP.N) board after a failed two-year attempt by his Pershing Square Capital Management hedge fund to remake the company into a more upscale retail chain.
Jos A Bank sells men’s apparel ranging from sportswear to formal suits. It also rents out tuxedos. The company’s revenue exceeded $1 billion in the year ended February 2.
Reporting by Aditi Shrivastava in Bangalore; Editing by Joyjeet Das