Works activist investor slams retailer’s absurd claims

The activist investor Kelso has pushed back against The Works’ claim that its proposed board appointment would “undermine” the retailer’s growth plan.

Kelso defends retired private‑equity partner Graeme Coulthard

Kelso, which holds about 10 % of the AIM‑listed discount retailer, is seeking to place retired private‑equity partner Graeme Coulthard on the board. The move follows a request for shareholders to vote on the appointment at the annual general meeting next month. Kelso’s chief executive, John Goold, told the outlet that Coulthard “would be a great addition to the board of The Works.”

The Works warned that Coulthard “has limited experience as a director of a listed company and no executive experience in multi‑site value retail operations.” The retailer said the appointment could “create unnecessary distraction and risk derailing” its growth strategy. It added the move “would not be in the best interests of the company or its stakeholders.”

Goold rejected those points, noting the former director’s prior role at Card Factory from 2010‑2015, where he “helped create very significant value for the owner Charterhouse Capital Partners.” He called the board’s claim “absurd” and “misleading.”

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Background of the board battle

The current dispute is not the first clash between Kelso and the retailer. In 2024, Kelso’s finance chief, Mark Kirkland, and Goold secured seats on the board, later orchestrating the removal of the former chair and the appointment of Stephen Bellamy. Both resigned in October 2024.

Kelso’s stake makes it the third‑largest shareholder, and the firm has previously described the company as “one of the most undervalued companies on the UK stock market.” Shares fell more than five percent on Thursday after the board’s broadside, trading at 88 p.

Under chief executive Gavin Peck, the retailer has been trying to shift its image from a “pile ‘em high, sell ‘em cheap” discounter toward a focus on screen‑free entertainment for children. It reported 3.3 percent sales growth and £260 million in revenue for the year to May, with adjusted profit up 44 percent to £7.2 million.

Kelso’s argument, to be set out in a shareholder statement on Friday, will likely stress that Coulthard’s private‑equity background and prior directorship experience bring strategic insight that the board claims are lacking. The investor has not indicated any intention to withdraw its request.

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Similar board‑seat battles have occurred at other UK retailers, where activist shareholders argue that fresh perspectives can unlock value that entrenched boards overlook. Outcomes often hinge on whether the proposed directors can demonstrate concrete operational expertise that aligns with the company’s strategic direction.

Coulthard also owns an eight‑percent stake in the retailer, suggesting a personal financial interest that aligns with shareholder returns. The company, however, maintains that his lack of recent executive involvement in a multi‑site retail operation could pose a risk to the execution of its growth plans.

City AM reports that Kelso will present its case to shareholders without further comment from The Works. The retailer has been contacted for a response but has not yet replied.

Shareholders will decide the next chapter.