Trust requests PSG Board to replace CEO

[chippa13 1844]

http://www.marketwired.com/press-release/walter-graeme-roustan-trust-requests-board-replace-ceo-performance-sports-group-ltd-2086468.htm

Interesting development.

MIRAMAR, FL--(Marketwired - Jan 7, 2016) - W. Graeme Roustan, Trustee of the Walter Graeme Roustan Trust, has requested the Board of Directors of Performance Sports Group Ltd. perform its primary fiduciary duty to the company and immediately replace Kevin Davis, the current CEO.

Mr. Roustan believes that Mr. Davis has personally lost the trust of many representatives of major retailers in Canada and the USA as he learned from survey results delivered to the Board on December 24^th, 2015.

Mr. Davis's abrupt company strategy shift as announced on January 8^th, 2015 to open retail stores, included the admission that the company will suffer financial losses at each store for up to two years, has also had a negative effect on the relationship with some retailers and a strategy that goes back to the beginning of the Bauer story in 1927.

The poor performance of the company's stock since the January 8^th, 2015 announcement alone is also cause for Mr. Davis's removal and replacement. The current President of the company, Amir Rosenthal, is more than qualified to assume the additional responsibilities of the CEO and this change would send the message out to the retailers that there is a new beginning at Performance Sports Group.

[shooter27 116]

This kind of stuff is fairly standard from an activist investor. The stock hasn't performed, so he's got to agitate for something. What is surprising is that usually in these releases they cite the actual poor performance of the company, not just the poor performance of the stock. A stock can perform poorly for a long time for a lot of reasons that have nothing to do with the actual performance of the company and that isn't the CEO's fault. The CEO is responsible for the direction and the financial performance of the company. Roustan draws a really hard and direct line between the opening of retail stores and the stock performance, which to me is suspect reasoning. I really highly doubt that the only reason the stock isn't performing is the opening of retail stores. I don't know how much of the stock that Roustan owns, but it is unlikely he owns enough to really make anything change on his own, which means he's going to need to get other institutional investors on his side.

[chippa13 1844]

I just did a quick google search on Roustan came up with some interesting history between he and PSG/Bauer.

[shooter27 116]

I believe he was a part of the original buyout of Bauer from Nike by Kohlberg & Co. Correct?

[chippa13 1844]

And he was their chairman for a while. He stepped down in 2012 and soon after the fun really started between them.