Crown Crafts explores its future

• By CHRIS GAUTREAU
• Advocate business staff
• Published: Jul 4, 2008 - Page: 1D - UPDATED: 12:05 a.m.

• Print
• Email
• Save
• Twitter
• Social Media

• Del.icio.us
• Digg
• Facebook
• Reddit
• 

Crown Crafts Inc., the Gonzales-based maker of infant clothing and bedding products, has agreed to form a “strategic review committee” to explore its future, though it did not elaborate on what the alternatives might include.

Under a compromise reached late Wednesday with its largest investor, Wynnefield Partners, Crown Crafts also agreed to allow the New York investment fund to increase its 15.6 percent stake in the company to 20 percent without objection.

Moreover, Crown Crafts appointed a second Wynnefield designee to its seven-member board of directors.

The agreement also apparently ends a lingering and sometimes bitter dispute weeks before Crown Crafts’ annual shareholders meeting in August.

Attempts to reach Crown Crafts and Wynnefield Partners Thursday were not successful. It was unclear, therefore, what the proposed review committee might consider.

The panel is scheduled to report its recommendations to the board in March.

Nelson Obus, a lead partner for Wynnefield, said in a joint release that the compromise resolves “serious concerns we have had about the company’s governance and performance.”

The dispute peaked last summer when an acrimonious proxy fight erupted after Wynnefield nominated Obus and another designee to the Crown Crafts board of directors.

Obus said the company lacked long-term planning and had not been aggressive enough in seeking new business. Crown Crafts executives countered that Wynnefield was merely trying to sell the company.

At the time, Obus said Crown Crafts’ alternatives included a potential sale, but said the company also should consider acquiring other companies or merging with an equal.

Obus lost in the balloting, though the other Wynnefield candidate, Rick Wasserman, won.

In its statement this week, Crown Crafts said it agreed to immediately appoint Joseph Kling to its board. Kling is described as a veteran consultant for the toy and juvenile clothing industries.

Crown Crafts also agreed to renominate Kling and Wasserman for their board seats at next month’s shareholders meeting.