Ricky Sandler‘s Eminence Capital has lost some confidence in its former second largest portfolio holding, Men’s Wearhouse Inc (NYSE:MW), according to a recent 13D filing with the Securities and Exchange Commission. The fund significantly decreased its stake in the men’s suits retailer by nearly 21% as it sold some 1.20 million shares at $49.80 in a single transaction on Wednesday. Eminence still holds 4.52 million shares of the company, representing 9.4% of its outstanding common stock.
Eminence Capital has been actively involved in the battle between Men’s Wearhouse Inc (NYSE:MW) and its former rival Jos. A Bank Clothiers since November 2013, when the fund disclosed a 9.8% activist stake in Men’s Wearhouse and urged for a merger between the two companies. In fact, it was Jos. A. Bank who first came with an offer to acquire Men’s Wearhouse, but the latter rejected the bid as inadequate. However, later on, Men’s Wearhouse decided to acquire Jos. A. Bank in a $1.8 billion deal that was completed last year. Mr. Sandler being a shareholder of both companies, supported Men’s Wearhouse’s decision to acquire Jos. A. Bank. “Eminence still holds a significant investment in Men’s Wearhouse and it remains among our top portfolio positions. We continue to have confidence in Men’s Wearhouse management, the company’s strategic direction and their opportunity to capitalize on the substantial benefits of the JOSB merger,” the fund said in an email statement.
Sandler increased his stake in Men’s Wearhouse Inc (NYSE:MW) by 25% in the fourth quarter according to his last 13F filing. His stake contained 5.72 million shares valued at $252.48 million, which represented nearly 4% of Eminence’s equity portfolio. Frank Brosens‘ Taconic Capital is another investor bullish on the men’s apparel retailer. After raising its stake by 49% during the fourth quarter, the fund holds around 2.09 million shares with a value of $92.05 million. The position constituted 3.13% of his fund’s portfolio value.
Fossil Group Inc (NASDAQ:FOSL) was Eminence’s largest holding at the end of the calendar year even after a 2% decrease in the position, which translated into shedding some 74,100 shares during the fourth quarter. According to the latest filing, the fund owned 2.72 million shares valued at $301.37 million of the designer, marketer and distributor of consumer fashion accessories. Among the 737 hedge funds that we track at Insider Monkey, 28 funds were invested in Fossil Group Inc (NASDAQ:FOSL), unchanged over the quarter. However, the total value of these funds’ stakes increased to $1.14 billion from $1.03 billion a quarter earlier.
Following a disappointing fourth quarter earnings release, Fossil is down by 24% year-to-date. The company’s Earnings per Share (EPS) of $3.00 were $0.11 below the estimates. Currency headwinds and also a drop in sales from its watches and leather division had an impact on Fossil Group Inc (NASDAQ:FOSL)’s revenue, which remained flat on the year.