-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HSJz1BJ8qxB4MQKMmosXJ8Zdv39SeinztsY4r4ZbzB/KYKi36zIEcSvM6x4tRNtL 7he1dmKeP2sSi/xRo8+/4w== 0001104659-06-001860.txt : 20060112 0001104659-06-001860.hdr.sgml : 20060112 20060112143112 ACCESSION NUMBER: 0001104659-06-001860 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20060112 DATE AS OF CHANGE: 20060112 GROUP MEMBERS: FIREBRAND PARTNERS, LLC GROUP MEMBERS: GLENHILL ADVISORS, LLC GROUP MEMBERS: GLENHILL CAPITAL LP GROUP MEMBERS: GLENHILL CAPITAL MANAGEMENT, LLC GROUP MEMBERS: GLENHILL CAPITAL OVERSEAS GP, LTD. GROUP MEMBERS: GLENHILL CAPITAL OVERSEAS MASTER FUND, L.P. GROUP MEMBERS: GLENN J. KREVLIN GROUP MEMBERS: IAN CHAPLIN GROUP MEMBERS: MICHAEL L. MEYER SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: REDENVELOPE INC CENTRAL INDEX KEY: 0001236038 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 330844285 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-79277 FILM NUMBER: 06526823 MAIL ADDRESS: STREET 1: 201 SPEAR ST STREET 2: 3RD FL CITY: SAN FRANCISCO STATE: CA ZIP: 94105 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GALLOWAY SCOTT CENTRAL INDEX KEY: 0001261993 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: C/O BRAND FARM STREET 2: 42 W 15TH STREET # 2 CITY: NEW YORK STATE: NY ZIP: 10011 SC 13D/A 1 a06-1717_1sc13da.htm AMENDMENT

 

 

UNITED STATES

 

 

SECURITIES AND EXCHANGE
COMMISSION

 

 

Washington, D.C. 20549

 

 

SCHEDULE 13D

 

Under the Securities Exchange Act of 1934
(Amendment No. 11)*

RedEnvelope, Inc.

(Name of Issuer)

 

Common Stock

(Title of Class of Securities)

 

75733R 60 1

(CUSIP Number)

 

Scott Galloway
42 W. 15th Street, #2
New York, NY 10011
(917) 567-2841

With a copy to:

Stuart G. Stein, Esq.
Hogan & Hartson L.L.P.
555 13th Street, N.W.
Washington, D.C. 22201
(202) 637-8575

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

January 10, 2006

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 



 

CUSIP No.   75733R 60 1

 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)
Scott Galloway

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 ý

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
PF, AF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
United States

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
1,396,790

 

8.

Shared Voting Power 
0

 

9.

Sole Dispositive Power 
1,396,790

 

10.

Shared Dispositive Power 
0

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person 
1,396,790

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11) 
15.5(1)

 

 

14.

Type of Reporting Person (See Instructions)
IN

 


(1)  Based upon 9,016,025 shares outstanding, as reported in RedEnvelope, Inc.’s Form 10-Q for the quarter ended October 2, 2005.

 

2



 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)
R. Ian Chaplin

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 ý

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
PF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
United States

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
0

 

8.

Shared Voting Power 
408,701(1)

 

9.

Sole Dispositive Power 
0

 

10.

Shared Dispositive Power 
408,701(1)

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person 
408,701(1)

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11) 
4.5(2)

 

 

14.

Type of Reporting Person (See Instructions)
IN

 


(1)  These shares are held jointly by Mr. Chaplin and his spouse.

(2)  Based upon 9,016,025 shares outstanding, as reported in RedEnvelope, Inc.’s Form 10-Q for the quarter ended October 2, 2005

 

3



 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)
Michael L. Meyer

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 ý

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
PF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
United States

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
65,066

 

8.

Shared Voting Power 
9,103(1)

 

9.

Sole Dispositive Power 
65,066

 

10.

Shared Dispositive Power 
9,103(1)

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person 
74,169(1)

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11) 
0.8(2)

 

 

14.

Type of Reporting Person (See Instructions)
IN

 


(1)  Includes 9,103 shares held of record by Mr. Meyer’s spouse.

(2)  Based upon 9,016,025 shares outstanding, as reported in RedEnvelope, Inc.’s Form 10-Q for the quarter ended October 2, 2005

 

4



 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)
Firebrand Partners, LLC

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 ý

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
AF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
Delaware

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
1,164,912

 

8.

Shared Voting Power 
0

 

9.

Sole Dispositive Power 
1,164,912

 

10.

Shared Dispositive Power 
0

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person 
1,164,912

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11) 
12.9(1)

 

 

14.

Type of Reporting Person (See Instructions)
OO

 


(1)  Based upon 9,016,025 shares outstanding, as reported in RedEnvelope, Inc.’s Form 10-Q for the quarter ended October 2, 2005.

 

5



 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)
Glenn J. Krevlin

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 ý

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
AF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
United States

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
1,164,912

 

8.

Shared Voting Power 
0

 

9.

Sole Dispositive Power 
1,164,912

 

10.

Shared Dispositive Power 
0

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person 
1,164,912

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11) 
12.9(1)

 

 

14.

Type of Reporting Person (See Instructions)
IN, HC

 


(1)  Based upon 9,016,025 shares outstanding, as reported in RedEnvelope, Inc.’s Form 10-Q for the quarter ended October 2, 2005.

 

6



 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)
Glenhill Advisors, LLC
13-4153005

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 ý

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
AF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
Delaware

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
1,164,912

 

8.

Shared Voting Power 
0

 

9.

Sole Dispositive Power 
1,164,912

 

10.

Shared Dispositive Power 
0

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person 
1,164,912

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11) 
12.9(1)

 

 

14.

Type of Reporting Person (See Instructions)
HC

 


(1)  Based upon 9,016,025 shares outstanding, as reported in RedEnvelope, Inc.’s Form 10-Q for the quarter ended October 2, 2005.

 

7



 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)
Glenhill Capital Management, LLC
13-4146739

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 ý

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
AF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
Delaware

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
0

 

8.

Shared Voting Power 
1,164,912 (1)

 

9.

Sole Dispositive Power 
0

 

10.

Shared Dispositive Power 
1,164,912 (1)

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person 
1,164,912 (1)

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11)
12.9(2)

 

 

14.

Type of Reporting Person (See Instructions)
HC

 


(1)  Glenhill Capital Management LLC, is the general partner of one of the Class A members of Firebrand, LLC.  The shares reported consist of the shares held by Firebrand Partners, LLC.

(2)  Based upon 9,016,025 shares outstanding, as reported in RedEnvelope, Inc.’s Form 10-Q for the quarter ended October 2, 2005.

 

8



 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)
Glenhill Capital LP
13-4149785

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 ý

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
AF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
Delaware

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
0

 

8.

Shared Voting Power 
1,164,912 (1)

 

9.

Sole Dispositive Power 
0

 

10.

Shared Dispositive Power 
1,164,912 (1)

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person 
1,164,912 (1)

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11) 
12.9(2)

 

 

14.

Type of Reporting Person (See Instructions)
PN

 


(1)  Glenhill Capital LP is a Class A member of Firebrand Partners, LLC.  The shares reported consist of the shares held by Firebrand Partners, LLC.

(2)  Based upon 9,016,025 shares outstanding, as reported in RedEnvelope, Inc.’s Form 10-Q for the quarter ended October 2, 2005.

 

9



 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)
Glenhill Capital Overseas GP, Ltd.
98-0426124

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 ý

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
AF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
Cayman Islands

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
0

 

8.

Shared Voting Power 
1,164,912 (1)

 

9.

Sole Dispositive Power 
0

 

10.

Shared Dispositive Power 
1,164,912 (1)

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person 
1,164,912 (1)

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11) 
12.9(2)

 

 

14.

Type of Reporting Person (See Instructions)
CO

 


(1)  Glenhill Capital Overseas GP, Ltd. is the general partner of one of the Class A members of Firebrand Partners, LLC.  The shares reported consist of the shares held by Firebrand Partners, LLC.

(2)  Based upon 9,016,025 shares outstanding, as reported in RedEnvelope, Inc.’s Form 10-Q for the quarter ended October 2, 2005.

 

10



 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)
Glenhill Capital Overseas Master Fund, L.P.
98-0426132

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 ý

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
AF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
Cayman Islands

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
0

 

8.

Shared Voting Power 
1,164,912 (1)

 

9.

Sole Dispositive Power 
0

 

10.

Shared Dispositive Power 
1,164,912 (1)

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person 
1,164,912 (1)

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11) 
12.9(2)

 

 

14.

Type of Reporting Person (See Instructions)
PN

 


(1)  Glenhill Capital Overseas Master Fund, L.P. is a Class A member of Firebrand Partners, LLC.  The shares reported consist of the shares held by Firebrand Partners, LLC.

(2)  Based upon 9,016,025 shares outstanding, as reported in RedEnvelope, Inc.’s Form 10-Q for the quarter ended October 2, 2005.

 

11



 

This Amendment No. 11 amends (a) the Schedule 13D filed on June 30, 2004 (the “Initial Schedule 13D”) by Scott Galloway, R. Ian Chaplin, Martin McClanan and Michael L. Meyer (the “Original Reporting Persons”) relating to the common stock, par value $0.01 per share (“Common Stock”) of RedEnvelope, Inc. (the “Issuer”), (b) Amendment No. 1 to the Initial Schedule 13D, filed on July 12, 2004, (c) Amendment No. 2 to the Initial Schedule 13D, filed on July 16, 2004, (d) Amendment No. 3 to the Initial Schedule 13D, filed on May 12, 2005, (e) Amendment No. 4 to the Initial Schedule 13D, filed on May 31, 2005, (f) Amendment No. 5 to the Initial Schedule 13D, filed on June 14, 2005, (g) Amendment No. 6 to the Initial Schedule 13D, filed on June 17, 2005, (h) Amendment No. 7 to the Initial Schedule 13D, filed on July 13, 2005, (i) Amendment No. 8 to the Initial Schedule 13D filed on August 26, 2005, (j) Amendment No. 9 to the Initial Schedule 13D filed on September 15, 2005, and (k) Amendment No. 10 to the Initial Schedule 13D filed on November 1, 2005.  References to this “Schedule 13D” are to the Initial Schedule 13D as amended by the aforementioned amendments, including this Amendment No. 11 to the Initial Schedule 13D.

 

Amendment No. 4 to the Initial Schedule 13D added Firebrand Partners, LLC, a Delaware limited liability company (“Firebrand”) and its affiliates as additional reporting persons.  References in this Schedule 13D to the “Reporting Persons” are to the reporting persons filing this Amendment No. 11 to the Initial Schedule 13D, including Firebrand and its affiliates.  Other capitalized terms used in this Amendment No. 11 without definition have the meanings given to them in the Initial Schedule 13D.

 

Item 1.

Security and Issuer

 

 

Item 2.

Identity and Background

 

 

Item 3.

Source and Amount of Funds or Other Consideration

 

 

Item 4.

Purpose of Transaction

Item 4 is supplemented as follows:

Although Mr. Galloway and the other Reporting Persons were pleased in July 2005 to have resolved certain issues with the Issuer relating to the composition and qualifications of the Board of Directors, the Reporting Persons remain concerned by the management failures and operational problems that continue to cause disappointing financial and operational performance by the Issuer, as well as disappointing stock price performance.  Mr. Galloway personally experienced the Issuer’s operational problems in connection with holiday orders he placed in December 2005.  

In light of these continued operational problems and management failures, on January 10, 2006, Mr. Galloway submitted to the Issuer a letter notifying the Issuer of his intent to solicit stockholder proxies in an attempt to remove several directors, including CEO Alison May, from the Issuer’s board of directors at the Issuer’s next annual stockholders meeting.  A copy of Mr. Galloway’s letter is filed as an Exhibit to this Schedule 13D.

Mr. Galloway also intends to submit a second demand letter with respect to his right, as a stockholder, to inspect the minutes of the Issuer’s Audit Committee.  Mr. Galloway had requested copies of these minutes in a letter to the Issuer dated October 27, 2005, a courtesy copy of which was also sent to each member of the Audit Committee.  Mr. Galloway has not yet received copies of the minutes requested.  Mr. Galloway believes that access to the minutes of the Issuer’s Audit Committee will provide important information regarding such committee’s oversight of management with respect to the Issuer’s disappointing financial performance.

Except as noted in this Schedule 13D, no Reporting Person has any plans or proposals which relate to, or would result in, any of the matters referred to in paragraph (a) through (j) of Item (4) of Schedule 13D. The Reporting Persons intend to maintain all available options to protect the value of their investment in the Issuer, however, and thus will continue to review their positions and may, at any time or from time to time, formulate plans or proposals with respect thereto.

 

 

Item 5.

Interest in Securities of the Issuer

 

 

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

 

 

Item 7.

Material to Be Filed as Exhibits

The following additional exhibit is filed herewith:

1.             Copy of letter sent by Scott Galloway to the Issuer on January 10, 2006.

 

12



 

SIGNATURES

 

After reasonable inquiry and to the best of my knowledge and belief, we certify that the information set forth in this statement is true, complete and correct.

 

Date: January 11, 2006

 

 

 

 

 

 

 

 

 

 

/s/ Scott Galloway

 

 

 

Scott Galloway

 

 

 

 

 

 

 

 

/s/ R. Ian Chaplin*

 

 

 

R. Ian Chaplin

 

 

 

 

 

 

 

 

/s/ Michael L. Meyer*

 

 

 

Michael L. Meyer

 

 

 

 

 

 

 

 

Firebrand Partners, LLC

 

 

 

 

 

 

 

 

/s/ Scott Galloway

 

 

 

Scott Galloway, Manager

 

 

 

 

 

 

 

 

/s/ Glenn J. Krevlin

 

 

 

Glenn J. Krevlin

 

 

 

 

 

 

 

 

Glenhill Advisors, LLC

 

 

 

 

 

 

 

 

/s/ Glenn J. Krevlin

 

 

 

Glenn J. Krevlin, Managing Member

 

 

 

 

 

 

 

 

Glenhill Capital Management, LLC

 

 

 

 

 

 

 

 

/s/ Glenn J. Krevlin

 

 

 

Glenn J. Krevlin, Managing Member

 

 

 

 

 

 

 

 

Glenhill Capital LP

 

 

By:

Glenhill Capital Management, LLC, its

 

 

 

General Partner

 

 

 

By:

Glenhill Advisors, LLC, its

 

 

 

 

Managing Member

 

 

 

 

 

 

 

 

/s/ Glenn J. Krevlin

 

 

 

Glenn J. Krevlin, Managing Member

 

 

 

 

 

 

 

 

Glenhill Capital Overseas GP, Ltd.

 

 

 

 

 

 

 

 

/s/ Glenn J. Krevlin

 

 

 

Glenn J. Krevlin, Director

 

 

 

 

 

 

 

 

Glenhill Overseas Master Fund, L.P.

 

 

By:

Glenhill Capital Overseas GP, Ltd., its

 

 

 

General Partner

 

 

 

 

 

 

 

 

 

 

/s/ Glenn J. Krevlin

 

 

 

Glenn J. Krevlin, Director

 


* By power of attorney included in Amendment No. 2 to the Initial Schedule 13D, filed with the Securities and Exchange Commission on July 16, 2004.

 

 

/s/ Scott Galloway

 

Scott Galloway

Attorney-in-Fact

 

13


EX-1 2 a06-1717_1ex1.htm UNDERWRITING AGREEMENT

Exhibit 1

 

Red Envelope Board of Directors:

 

This holiday season represented a great opportunity for Red Envelope (“RE”) to finally realize the promise of the brand.  Kristine Dang (SVP, Merchandising) and her team deserve credit for putting together a great looking holiday book.  In addition, growth in our primary channel (Internet) continues to outpace growth in other channels.  However, I fear that, yet again, the company has managed to snatch defeat from the jaws of victory.

 

On 12/16 I placed order # P1074832—50 gifts for a holiday event to be held the evening of the 19th.  The RE customer service representative suggested overnight shipping to “make sure” the gifts arrived in time and I agreed to the additional charge.  By Friday morning (12/19) none of the gifts had arrived, and I had an associate call to check the status of the order.  My associate called several times and each time was assured that the gifts would arrive by close of business that day.  Of the 50 gifts, approximately 1/3 arrived in time.  The remaining gifts arrived after the event and were returned to RE.

 

Like most of the operational problems that have plagued this company, this gaff represents a chorus of poor performance:  order entry, fulfillment, shipping, systems, etc.   It’s possible that I was just unlucky.  However, operational surprises have become the norm and if a $1,000 + order was botched, who knows how many other countless customers were disappointed.  The returns are easy to measure.  What’s difficult, and more insidious, to measure is the erosion in goodwill (i.e., people who will never order from RE again).

 

The poor management skills of our CEO continue to metastasize in different parts of the organization.  This has created an air of insecurity and uncertainty surrounding the company that continues to crush shareholder value.  Why hasn’t the company, like the majority of other publicly traded retailers, issued some sort of statement regarding holiday sales?  The radio silence coupled with a reputation for unwelcome surprises is punishing the stock.

 

Ms. May is a failed CEO who has been miscast in her role.  However, the real culpability rests with the board members who have, for several years now, clung to the CEO in pursuit of misguided vindication.   As my continued purchases suggest, I believe this is a grossly underperforming asset that needs to be liberated from current management.  It is my intention to solicit RE shareholders in an attempt to remove Ms. May, and several directors, from the board at the firm’s annual meeting.  Under separate cover, I am again requesting the minutes from the audit committee meetings leading up to the accounting debacle in early ‘05.

 

Please feel free to call me on 917-567-2841 or at sgalloway@firebrandpartners.com.

 

Regards,

 

Scott Galloway

Co-founder

 


-----END PRIVACY-ENHANCED MESSAGE-----