An investment group says Urban Outfitters' lack of diversity on its board is to blame for its subpar performance.
On Monday, the union-affiliated CtW Investment Group sent a letter to shareholders criticizing the retailer's directors for their “extreme insularity” reports Bloomberg.
"For a company that is so reliant on global sourcing and focused on women," CtW executive director Dieter Waizenegger wrote, "it is surprising that the board consists of largely Caucasian males with law and finance backgrounds."
Waizenegger recommended that shareholders vote against the re-election of two of the board's longest-serving members, Robert Strouse and Harry Cherken Jr., citing "the company’s failure to address growing concerns regarding the diversity of the board" as well as "changes in consumer spending habits."
Of the nine members on Urban Outfitters' (urban) board, only two are women—and one them is the wife of CEO Richard Hayne. In an emailed statement to Fortune, the retailer maintained that it "has a longstanding record of engaging with shareholders and responding to their suggestions, and, in particular, has been demonstrably responsive to shareholders' input regarding Board composition and governance."
Urban Outfitters pointed out that in the past six years, it has adopted majority voting, added a lead independent director as well as three other independent directors, and added the two aforementioned female board members.
Subscribe to the Broadsheet, Fortune’s newsletter for and about powerful women.
According to the CtW letter, the company's directors have an average tenure of 19 years. That's more than twice the U.S. average, according to a recent analysis. As part of its statement to Fortune, Urban Outfitters said that " changing the composition of a Board is not something that can or should take place overnight and that the company "has been taking targeted, strategic steps to alter the make-up of the Board over time."
Urban Outfitters has been underperforming for some time now. Its most recent earnings fell short of expectations, which Hayne blamed on a housing-like bubble during a March call to investors. "Our industry, not unlike the housing industry, saw too much square footage capacity added in the '90s and early 2000s. Thousands of new doors opened and rents soared. This created a bubble. And like housing, that bubble has now burst," Hayne said. Shares have fallen by half from their all-time high of two years ago.
Adding more women to its board may help, according to research. A 2016 EY report found that companies with at least 30% female leaders had net profit margins up to 6 percentage points higher than companies with no women in the top ranks. A 2015 report by McKinsey & Co. found that companies in the top quartile for gender diversity are 15% more likely to have financial returns above their national industry medians. Another piece of research, conducted in 2007 by diversity consultancy firm Catalyst, found that Fortune 500 companies with at least three female directors have 42% higher return on sales and 53% higher return on equity.