Kohl’s board is going to be challenged again by activist investors, report says
A Kohl’s Corp. investor that took part in the public campaign for control of the retailer’s board of directors earlier this year still isn’t happy, a new report says.
Macellum Advisors GP LLC, an activist hedge fund, has plans to nominate new directors to the company’s board because it believes that not enough has been done to improve the business, according to a report from Reuters.
The Reuters report published Thursday cites two people familiar with the matter who spoke on the condition of anonymity.
The Menomonee Falls-based retailer has more than 1,100 stores in 48 states. Kohl’s did not immediately respond to questions Thursday.
Kohl’s and the investors have an agreement that prevents the fund from making a statement, Reuters said.
Kohl’s sales have rebounded since the early days of the COVID-19 pandemic when consumers stopped spending and stores were closed.
The company’s latest quarterly sales were up about 15% compared to the same period last year. Its total revenue so far through 2021 is less than the company brought in through the same period in 2019 and 2018. Kohl’s unveiled a new strategic plan in October 2020, which included its partnership with Sephora that launched this year.
Macellum was part of a group of investors that waged a public campaign to take control of Kohl’s board of directors earlier this year. Ancora Holdings Inc., Legion Partners Asset Management LLC and 4010 Capital LLC were all part of the campaign.
The activist investors initially sought to take control of the company’s board. At that time, the investors said Kohl’s had “chronically underperformed” and suggested the company should sell its real estate and lease back its stores.
Kohl’s and the investors, who own around 9.3% of the company’s stock, came to an agreement in April. Kohl’s expanded its board and two of the new directors were nominated by the investor group as part of the agreement.
Margaret Jenkins from Citi Trends Inc. and Thomas Kingsbury from Big Lots and Burlington Stores Inc. joined the board at the end of the 2021 annual meeting of shareholders.
Earlier this week, another investor pressured Kohl’s to make changes. New York-based hedge fund Engine Capital LP sent a letter that suggested Kohl’s consider splitting off its e-commerce business or selling the company.
CEO Michelle Gass said in an interview on CNBC Wednesday Kohl’s is reviewing the proposals.
“Like we would any big idea, we are putting a lot of resources to understand what this means for our business,” Gass said in the interview.
Kohl’s stock closed at $50.66, down 46 cents Thursday.