Sanderson Design Group is facing a shareholder revolt targeting its chair, Dame Dianne Thompson, a former chief executive of the National Lottery.
LBV Asset Management, which holds approximately 14 per cent of the AIM-listed company, is formally pushing for Thompson to be removed as both director and chair.
The investor told Sanderson last month: “This is by no means an indictment on Dame Thompson’s career or character, both of which are incredibly distinguished.”
LBV added: “It is an indictment on the current state of the company, which requires leadership — and a chairman — with the mandate and sufficient tenure ahead of him or her to lead a sustained period of change.”
Sanderson holds a Royal Warrant, meaning its fabrics and wall coverings feature in the official residences of the royal family, and it launched a collection inspired by King Charles’s Highgrove Estate in February.
Several other shareholders in the firm have voiced support for LBV’s position, citing persistent strategic underperformance and concerns over executive pay.
Paul Hawkins, an asset manager holding a personal stake in Sanderson, said the group’s “only excuse for poor performance always seems to come back to difficult economic conditions.”
Hawkins added: “That’s simply not good enough, especially when your biggest competitor in Colefax is performing well.”
Sanderson posted a £3m pre-tax profit in the year to January, recovering from a £14m loss the previous year, under the leadership of chief executive Lisa Montague.
Despite that recovery, LBV has criticised the board’s approval of Montague’s £729,000 pay package, which combined with the finance chief’s pay accounted for 36 per cent of the group’s total profit.
Hawkins said: “They are being paid extremely well to repair the profitability that has fallen so considerably under their watch. The Chair doesn’t appear to have a credible answer as to why this is justified.”
Shareholders have also raised concerns about Sanderson’s relocation to Voysey House, a Grade II-listed building in Chiswick, west London, describing it as a “vanity project” and a “poor use of shareholder funds.”
One shareholder close to the firm’s senior management said: “Everyone in the industry is at Chelsea Harbour, but Sanderson, at a time of extremely poor performance, decided to relocate to Voysey House.”
Rhys Summerton, founder of Milkwood Capital, acknowledged the upgrades to Voysey House were “lavishly done,” but said the move to the firm’s “historical home” made sense in principle.
Summerton confirmed Milkwood has backed LBV’s proposals, stating: “Shareholders neglect the company and the decision-making sometimes and the scrutiny of the executives, and that results in underperformance.”
A spokesperson for Sanderson defended the relocation, saying Voysey House is “central to unlocking the commercial value of our 75,000-piece archive, bringing together our design teams and providing a hub for global customer engagement and partnerships.”
Shareholders have also criticised Sanderson for being slow to expand in the United States, where AIM-listed rival Colefax has reported an “exceptionally strong sales performance.”
Licensing revenue grew by a third to £9m in the year to January, but shareholders argue this figure is masking broader underperformance across the business.
A person close to LBV noted the investor has never previously taken such direct action against a company, saying: “They are not an aggressive player in that way but this time they feel they had no choice.”
Sanderson’s spokesperson pushed back firmly, stating: “The Board firmly believes neither of LBV’s proposed resolutions are in the best interests of the Company and its shareholders,” adding that the full response would be set out in a forthcoming shareholder circular.