Mark Higgins, son of the late founder of Trans World Entertainment Corp. Robert Higgins, has withdrawn his slate of nominees to the board of directors.
The slate included Jeff Hastings, SVP, domestic sales, Paramount Home Entertainment, and Philip Knowles, former CEO of Trinity Home Entertainment and MVP Home Entertainment.
In a June 12 filing, Higgins withdrew his candidates for the June 27 shareholder meeting after TWEC — which operates the f.y.e. (For Your Entertainment) retail chain — formally added Hastings as a board nominee.
With shares of Trans World Entertainment Corp. (parent to home entertainment retailer f.y.e.) in danger of being delisted, fiscal profits plummeting into expanding losses, Mark Higgins, son of late founder Robert Higgins, wants to shake up the board of directors.
The younger Higgins, who owns 1.2% of the company’s shares, in a regulatory filing, submitted the names of four board nominees (including himself), for shareholders to vote on at the annual meeting on June 27.
Among the nominees, two home entertainment executives: Jeff Hastings, VP, sales planning and forecasting at Paramount Home Entertainment, and Philip Knowles, former CEO of Trinity Home Entertainment and MVP Home Entertainment.
Higgins, who began working at Trans World Entertainment in 1981, served as chief merchandising officer for two years until the appointment of Mike Feurer as CEO in 2014.
Founder Robert Higgins, who died in 2017 at the age of 75, oversaw a retail operation that at its peak (2001) operated about 1,000 stores generating $1.4 billion in revenue.
TWEC currently operates about 200 f.y.e. stores, which generated an operating loss of $24.5 million on revenue of $231.2 million in the most-recent fiscal year.
Independent auditor KPMG disclosed the retailer’s primary source of liquidity involves borrowing under a revolving credit facility, and that “substantial doubt exists about the company’s ability to continue as a going concern.”
“Shareholders have suffered from an extended period of stock price decline and poor operating results that I believe warrants an overhaul in the boardroom,” Higgins wrote. “Since early 2015, shareholders have suffered nearly a complete loss of value, experiencing total shareholder returns of negative (-90%) while the company’s market capitalization has declined by over $88 million.”
While TWEC has suffered due to changing consumer home entertainment habits and declining mall-based foot traffic, Higgins puts much of the blame on Feurer.
The CEO in 2016 pushed for the $75 million acquisition eTailz.com, an ecommerce middleman operating largely through Amazon. The Spokane, Wash.-based unit generated an operating loss of $62 million in the most-recent fiscal period.
“In fiscal 2017 alone, the company incurred losses of over ($42.5) million and had earnings-per-share of negative ($1.18); yet, for the same year, Feurer was awarded a bonus of $350,000 and an additional $260,890 of incentive compensation (not to mention $203,500 more in stock and option awards),” Higgins wrote.
“I believe the company has tremendous potential and a valuable and dedicated workforce of more than 2,200 employees that can thrive with the right board and management team in place. I believe that the nominees, if elected, will bring about changes that will benefit Trans World Entertainment and its shareholders.”