The Works has become embroiled in a boardroom battle with activist investor Kelso Group after it hit back at the retailer’s attempts to block its proposed new director.
Kelso, which owns 10 per cent of The Works, is pushing for former private equity executive Graeme Coulthard to join the retailer’s board and has urged shareholders to back his appointment at its AGM on 7 September. Coulthard separately owns an eight per cent stake in the retailer.
The Works yesterday unanimously urged shareholders to reject the proposal, arguing Coulthard’s appointment could distract management from its growth strategy, weaken the balance of independent directors on its board and risk destroying shareholder value.
However, Kelso has now fired back, branding some of the retailer’s arguments “misleading” and its suggestion that Coulthard could undermine value creation “absurd”.
The activist investor particularly challenged The Works’ claim that Coulthard lacks relevant multi-site value retail experience.
Coulthard spent 19 years as a partner at private equity firm Charterhouse and joined the board of Card Factory after Charterhouse acquired the retailer in 2010. He remained involved through its rapid store expansion and 2014 stock market flotation.
Kelso said his experience at Card Factory was directly relevant to The Works and argued the proposed appointment was a “modest and reasonable” request given Kelso and Coulthard together represent around 18 per cent of the retailer’s shareholder base.
The Works has argued that Coulthard would be classed as a non-independent director, meaning independent non-executives would no longer make up a majority of its board.
Kelso countered that The Works could resolve any concerns over board balance by appointing an additional independent non-executive director.
The row comes as The Works pushes ahead with its Elevating The Works growth strategy under chief executive Gavin Peck.
The Works said adjusted EBITDA before IFRS 16 had risen to £14m in its latest financial year, compared with £6m in 2024, while like-for-like sales jumped 8.8 per cent during the first 11 weeks of its new financial year.
It is targeting £22.5m in adjusted EBITDA by 2030 at the latest.
It also pointed to three earnings upgrades since unveiling its growth strategy in January 2025 and said its share price had quadrupled over the past 18 months as evidence that its current management and board structure was delivering.
Kelso, however, has been an influential shareholder in the retailer before. Its chief executive John Goold and finance boss Mark Kirkland previously joined The Works’ board in 2024 before stepping down later that year.
The battle will now be put to investors, with shareholders set to vote on Coulthard’s appointment at The Works’ AGM next month.
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