Key facts
- Activist investor Kelso is pushing to install Graeme Coulthard, a retired private equity partner, as a director at The Works.
- The Works warned that the proposed appointment risks derailing its growth strategy and undermining long-term value.
- The retailer argued Coulthard lacks sufficient experience as a director of a listed company and in multi-site value retail operations.
- Coulthard, who owns 8% of The Works, previously served on the board of Card Factory.
- The Works' shares fell more than 4% to 89p after the company criticized Kelso's proposal.
Discount retailer The Works is embroiled in a boardroom dispute as activist investor Kelso seeks to appoint Graeme Coulthard, a retired private equity partner, to its board of directors. The retailer expressed strong opposition to the move, warning that it could create "unnecessary distraction" and "risk derailing" its growth strategy and long-term value creation.
Kelso, which holds an 8% stake in The Works, has formally requested Coulthard's appointment at the upcoming annual general meeting. The Works stated it pleaded with Kelso to withdraw the request, but the activist investor remains intent on proceeding. The retailer argued that Coulthard's appointment would likely prioritize specific shareholder interests over the broader base, potentially leading to value destruction.
The Works also criticized Coulthard's qualifications, stating he has limited experience as a director of a listed company and no executive experience in multi-site value retail operations. While acknowledging his background in accountancy, the company noted that its board already possesses significant expertise in this area and that Coulthard's experience is primarily as a private equity investor, not a business operator. Furthermore, The Works claimed Coulthard has not completed the necessary due diligence checks required for an AIM-listed firm director.
This is not the first time Kelso has sought to influence The Works. In 2024, the activist investor secured two board seats, which coincided with a jump in the retailer's share price. Earlier this year, Kelso's increased stake led to another spike in the share price, with the investor describing The Works as "one of the most undervalued companies on the UK stock market."
Despite the boardroom drama, The Works has been working to rebrand itself beyond a "pile 'em high, sell 'em cheap" image, focusing on "screen-free" entertainment for children. CEO Gavin Peck noted that government initiatives, such as crackdowns on children's social media usage, have boosted awareness of these efforts. The retailer reported a 3.3% increase in sales and £260 million in revenue for the year ending May, with adjusted profit rising 44% to £7.2 million.