Deckers Responds To Marcato Letter Calling For Board Changes

Deckers Outdoor Corp DECK stock saw great volatility Tuesday afternoon on news that Marcato Capital Management threatened dramatic changes to the board if the company failed to pursue a sale. The activist investor owns 6 percent of Deckers shares.

“While we typically seek to work constructively with boards to implement change, we view this situation differently,” Marcato’s letter to the board read. “Given Deckers' chronic underperformance, stockholder frustration and fatigue, a sale of the Company in this case very likely offers the highest risk-adjusted return for stockholders. If, for any reason, the process fails to produce a desirable outcome, we believe a new management team led by a new Board of Directors will be much more likely to succeed in achieving the revenue and expense opportunities at Deckers.”

Marcato’s previous campaigns have proven successful, including leadership shakeups at Buffalo Wild Wings BWLD and Rent-A-Center Inc RCII.

A Deckers representative declined to comment on the news but affirmed the board’s exploration of "strategic alternatives."

“We appreciate the views of our stockholders,” the spokesperson told Benzinga in a written statement. “As previously announced on April 25, 2017, our Board of Directors is reviewing a broad range of strategic alternatives to enhance stockholder value. As always, our Board of Directors will continue to take actions that are in the best interests of the Company and all stockholders.”

Deckers’ initially plunged 1 percent on the report before spiking up 1.8 percent off an intraday low. It ultimately closed up 1.2 percent on the day at $67.72. 

Image credit: Jeff Clark, Flickr