A group of activist investors attempting to execute a turnaround at Kohl’s Corp. has reduced the number of directors that it plans to nominate to the retailer’s board.
In a letter sent to shareholders this morning, the group — including Macellum Advisors GP LLC, Ancora Holdings Inc., Legion Partners Asset Management LLC and 4010 Capital LLC — announced that it has revised its proxy statement to nominate just five individuals to Kohl’s board. It had originally nominated nine candidates to the 12-member board of directors.
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“To be clear, our campaign is to construct the strongest possible board with directors who possess relevant retail, capital allocation, strategy and corporate governance expertise — and who will also serve as strong advocates for shareholders,” it wrote. “We remain open to constructive dialogue with the company aimed at achieving a positive resolution for all Kohl’s shareholders.”
Among those nominees are Jeffrey Kantor, who spent 36 years at Macy’s Inc. in numerous senior leadership roles, including chief merchant, chief stores and HR officer and chairman of Macys.com.; Thomas Kingsbury, former CEO of Burlington Stores Inc.; and Cynthia Murray, who served as president of Chico’s FAS.
“Each of our nominees were selected for their specific retail expertise that corresponds to issues that have historically plagued the company and for their intense focus on creating long-term sustainable shareholder value,” the group said.
FN has reached out to Kohl’s for comment.
Two and a half weeks ago, the group, which has a combined 9.5% stake in Kohl’s, suggested that the chain wasn’t adequately addressing stagnant sales and declining operating margins — issues, they said, that preceded the COVID-19 health crisis. It added that the current board collectively owns just 0.5% of the department store’s outstanding shares, which it said was “an impediment to serving shareholder interests.”
Kohl’s rejected the proposal, indicating that the takeover would “disrupt our momentum, especially considering that we are well underway in implementing a strong growth strategy and accelerating our performance.” As part of its strategic plan announced in October, the Menomonee Falls, Wis.-based company seeks to achieve better operating margins at a level of between 7% to 8%. It has also forged a long-term partnership with beauty giant Sephora, expanded its contactless offerings and delivered better-than-expected fourth-quarter earnings and sales.