Activist investor Kelso has hit back at high street discounter The Works after the retailer warned that installing a new board director would risk derailing its ongoing corporate strategy. The dispute centers on Kelso’s push to secure a board seat for retired private equity partner Graeme Coulthard during the company’s upcoming annual general meeting next month.
The friction between the two firms escalated after The Works publicly urged its investors to block the appointment. According to the retailer, adding Coulthard could create an unnecessary distraction and lacks strategic alignment, arguing that he possesses limited experience as a director of a listed company and no executive background in multi-site value retail operations.
Kelso, which holds a 10 per cent stake in The Works and ranks as its third-biggest shareholder, sharply rejected those assertions. John Goold, chief executive of the FTSE 250 investment firm, told City AM that the retailer’s claims were misleading and described the board’s opposition as absurd.
Boardroom Clash Over Relevant Retail Experience
At the heart of the disagreement is a sharp contrast in how the two parties view Graeme Coulthard’s professional background. Coulthard owns an eight per cent stake in The Works and spent 19 years as a partner at London-based private equity firm Charterhouse before retiring in 2017.
Kelso maintains that Coulthard’s previous tenure as a director of the Card Factory between 2010 and 2015 provides direct, highly relevant experience in multi-site value retailing. Goold argued that during that period, Coulthard helped create substantial value for Charterhouse Capital Partners, making the discount retailer’s warnings groundless.
The Works warned shareholders that the governance shift would not serve the best interests of the company or its stakeholders. The AIM-listed retailer sells toys, arts, and crafts across its high street locations, and its leadership team has been working to reshape its market image.
Wider Context and Share Price Impact
The public sparring has already left a mark on the company’s market valuation. Following the release of the board’s broadside against the activist investor, shares in The Works fell by more than five per cent to 88p.
This tense exchange follows earlier interventions by Kelso into the retailer’s governance. In 2024, Goold and Kelso’s finance chief, Mark Kirkland, secured seats on the board, subsequently pushing for the departure of the company’s then-chair and orchestrating the appointment of successor Stephen Bellamy, according to a source familiar with the matter. Both Goold and Kirkland stepped down from the board in October 2024.
Despite the ongoing board-level friction, Kelso remains supportive of Chief Executive Gavin Peck and his overarching leadership strategy. Under Peck, the retailer has sought to move past its traditional reputation as a budget discounter by emphasizing screen-free children’s entertainment to attract British families.
Financial results for the year ending in May showed positive momentum for the retailer, posting 3.3 per cent sales growth and £260m in revenue, which lifted adjusted profit up 44 per cent to £7.2m.
Next Steps for Shareholders
Kelso is scheduled to release a detailed statement outlining its formal arguments for Coulthard’s appointment. Shareholders will ultimately decide the matter next month during the company’s annual general meeting.
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