Syms – the off-price clothing chain whose slogan is “an educated consumer is our best customer” – has a few shareholders who would like to be enlightened, as well.
In an unusual move this week, the Secaucus, NJ, retailer voluntarily delisted its shares from the New York Stock Exchange.
Syms, which also aims to deregister its shares under federal securities laws in less than three months, says the moves will save it $750,000 a year and eliminate the hassles of complying with Sarbanes-Oxley accounting guidelines.
But the news has spooked investors. The company’s shares are off more than 40 percent since the delisting was first announced on Dec. 21, wiping out more than $100 million in market capitalization.
Yesterday, the shares closed at $10.05 on Pink Sheets, an electronic over-the-counter market.
Some investors worry that Syms’ operations will be more opaque to shareholders and lenders, despite the company’s protests to the contrary.
Shareholders Barrington Capital Group and investment fund Esopus Creek, which together own 9.7 percent of Syms, advocate moving to the Nasdaq, which they say would be cheaper than an NYSE listing.
But there’s a still-bigger fear among shareholders: that the company’s chairman and its chief executive – the father-daughter team of Sy and Marcy Syms – are angling to take Syms private on the cheap.
“Absolutely not,” CEO Marcy Syms told The Post. “That is not at all the intent of this move.”
True her father Sy tried and failed to take the company private in 1995, Syms admits. But “it’s a different world today,” she said.
Syms noted, for example, that the company issued a one-time dividend of 60 cents a share last July.
“You don’t deplete cash flow or cash reserves if you’re thinking of going private,” Syms said.
She added that neither she nor her father – who together own about 57 percent of Syms – have purchased Syms shares since the Dec. 21 announcement, and neither has the company.
Meanwhile, Syms’ board has ordered that the company can’t go private before May 31, 2009.
“I don’t know what the world’s going to look like in May of ’09,” Syms said.
Lately, the company has shown an appetite for its own shares. In spring 2006, it launched a tender offer for 3.4 million shares at $18 each, but only got takers for about 436,000. The board then authorized Syms to buy back 20 percent of its shares by June of this year.
While Syms was only marginally profitable during the first three quarters of the current fiscal year, some investors say its shares are valuable because of the company’s real estate.
Syms declined to comment on the value of its holdings, which, for example, include its multilevel store at 42 Trinity Pl. near Battery Park. But investors say the real estate is worth between $15 and $30 a share.
“We know there’s a lot of real-estate value in the company,” said Thomas Graham Kahn, president of Kahn Brothers & Co., a New York investment firm. “We wouldn’t be surprised if it’s in the high-teens [of dollars per share].”