Clinton Group is urging Select Comfort to oust CEO Bill McLaughlin and take the company in a new direction. The New York-based hedge fund holds a 7 percent stake in Select Comfort, according to the Securities Exchange Commission filing.
The investment group wants the Plymouth, Minn.-based company to revise its strategy to focus on direct marketing and ending new store openings until sales improve.
The call for change comes after Select Comfort suffered a considerable first-quarter loss. McLaughlin initially blamed weak sales due to a faltering economy and a decrease in consumer spending. The company had also reduced media spending in anticipation of the launch of a new marketing campaign, according to the report.
Clinton Group was displeased when the company denied its request for two board seats.
McLaughlin joined Select Comfort as president, CEO and a member of its board in 2000. In May 2004, McLaughlin was also named chairman of the board. He previously served as an executive at PepsiCo Foods international.