Engagement Drives Leadership Shuffle, Fueling an over 500% Surge in Fossil Shares Within Approximately Two Years of Board Appointment
After the share price of the watchmaker Fossil Group, Inc. had declined by nearly 97%—to a level representing a discount of more than 80% to its certified net asset value—under the leadership of its long-tenured Chairman and Chief Executive Officer, Kosta N. Kartsotis, The Buxton Helmsley Group, Inc. (“BHG”) and its affiliates began to accumulate a material ownership position. In September 2023, Alexander E. Parker, on behalf of BHG, opened private correspondence with Fossil’s board of directors, posing a series of questions intended both to test the integrity of the company’s financial reporting and to understand why the board had not pursued certain measures that Mr. Parker and BHG considered to be plainly in the interest of Fossil’s stockholders, the absence of which the firm regarded as a likely contributor to the company’s precipitous decline.
The Approach
Having not received the responses it expected through that private correspondence, BHG, in February 2024 and at Mr. Parker’s direction, commenced a proxy campaign to seek representation on Fossil’s board. As part of that stockholder action, BHG nominated four directors for election at the company’s 2024 annual meeting of stockholders.
Approximately three weeks after BHG commenced its proxy campaign, on March 13, 2024, Kosta Kartsotis stepped down from his positions as Chairman and Chief Executive Officer, and from the board, concluding a tenure of more than twenty years at the head of the company. The company concurrently disclosed that it was pursuing asset sale-and-leaseback opportunities, as Mr. Parker had proposed.
On March 24, 2024, Fossil averted BHG’s imminent proxy contest by entering into a cooperation agreement under which it seated BHG’s nominee, Pamela B. Corrie, as a director; two new directors were added to the board that day. Within two months of that agreement, the market value of Fossil’s equity had risen by more than 80%.
The Outcome
On July 1, 2024, Fossil announced the departure of its chief financial officer, Sunil Doshi.
Within approximately two years of Fossil’s agreement to collaborate with Buxton Helmsley—marked by the seating of Buxton Helmsley’s nominated director candidate on the company’s board—Fossil’s shares had appreciated by more than 500% in market value.
Relevant Disclosure
The investor-engagement campaign described above was conducted by The Buxton Helmsley Group, Inc., which was previously authorized to use the “Buxton Helmsley” trademark. The Buxton Helmsley Group, Inc. is in no way affiliated with Buxton Helmsley, Inc. or its affiliated entities. The foregoing is relevant to Buxton Helmsley, Inc. and its affiliated entities solely by reason of their employment of the same key principal, Alexander E. Parker.