Social & Governance Issues: Fashion Retailer
Material ESG Issues: Governance issues have led to the loss of market share, revenue, and margin, and are putting the brand on a downward spiral. Management misread US social trends and publicly expressed views on social topics that resulted in loss of customers and market share.
Loomis Sayles Analyst View: The analyst discussed her concern over the involvement and leadership of the co-founder, CEO and Director of the Board. She highlighted the risks related to management's inability to navigate the drastic retail and social changes underway. Also the Board has only three female members; one is a family member to the co-founder.
Engagement: The analyst spoke with several senior management representatives over time and learned that the CEO for this particular brand has a limited ability to implement fundamental change. We continue to engage with management over these concerns.