Activist Investor Aims to Oust Kohl’s CEO and Chairman
Another activist investor is making demands of Kohl’s.
Ancora Holdings, which owns 2.5% of shares at Kohl’s, is asking the board of directors to oust company CEO Michelle Gass and chairman Peter Boneparth. In a Thursday letter to the board of directors, Ancora Holdings leadership emphasized the need for leaders with more experience in turning around a business at “this critical fork in the road” for the company.
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“During the Boneparth era, the Board has created an environment in which Ms. Gass is no longer well-positioned to lead,” read the letter, which later added, “Looking ahead, we believe shareholders’ capital should be utilized to compensate a new chairman and chief executive officer that possess operating expertise and turnaround pedigree.”
Kohl’s said in a statement that the board “unanimously supports Michelle Gass and her leadership team.”
“We remain committed to maximizing value and acting in the interests of all our shareholders by staying focused on running the business, and the board continues to actively engage with management to navigate the current retail environment,” the company said.
This is not the first time at activist investor has pressured Kohl’s to make major changes to its business.
In January, Macellum Advisors, which owns nearly 5% of shares at Kohl’s, sent an open letter to other shareholders to call out Kohl’s for “mismanaging” the business and “failing to implement necessary operational, financial and strategic improvements.” A week later, the activist investor advised the company to strongly consider a sale of the company and also asked for Kohl’s to put a Macellum representative on the board. And in December, investor Engine Capital LP, which owns 1% of outstanding shares at Kohl’s, asked the company to separate its physical store business from its e-commerce business. Engine also asked the company to run a market test to determine how much certain financial sponsors would pay per share for the company.
The renewed pressure comes during a rough time for Kohl’s. Earlier this month, it was named in a new class action lawsuit that accused the retailer of misleading shareholders about the “company’s business, operations and compliance policies,” including failing to disclose that the company’s strategic plan was not engineered in a way to help the company achieve its goals.
Kohl’s in May reported lower-than-expected results in the first quarter of 2022 amid weakened demand and inflationary pressures.
The company also failed to complete a negotiation to sell itself a few months ago. After entering into exclusive negotiations in early June with Franchise Group to discuss a potential sale of its business, the Menomonee Falls, Wis.-based retailer said on July 1 that it withdrew from the process. The offer, initially priced at $69 per share, was downgraded to around $60 per share on June 6 and revised again to $53 per share on June 29.
Earlier this month, reports revealed that Kohl’s was in talks with private equity firm Oak Street Real Estate Capital LLC to discuss potentially selling its real estate assets for around $2 billion.
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