Kanen Wealth Management Sends Letter To Fossil Group Board
Portfolio Pulse from Benzinga Newsdesk
Kanen Wealth Management (KWM) has sent a critical letter to Fossil Group's board, expressing concern over the company's slow execution of its Transform and Grow (TAG) plan and its failure to return to profitability. Fossil's shares have dropped approximately 80% since the announcement of TAG in February 2023. Despite efforts like closing stores and reducing headcount, Fossil reported a loss for the year. KWM, owning just under 4% of Fossil's 7% debt due in 2026, suggests more rapid actions to reduce expenses and proposes buying back baby bonds at a discount to improve capital allocation.
April 18, 2024 | 7:31 pm
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Kanen Wealth Management's letter criticizes Fossil Group for its slow strategic execution and suggests aggressive measures to improve profitability and capital allocation.
The critical letter from Kanen Wealth Management highlights significant concerns about Fossil Group's current strategy and execution, potentially leading to negative investor sentiment in the short term. The suggestion to buy back baby bonds at a discount could be seen as a strong move to improve capital allocation, but the overall tone of the letter and the mention of an 80% drop in share price since the announcement of the TAG plan could lead to further loss of confidence among investors.
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IMPORTANCE 90
RELEVANCE 100