Kohl’s Annual Meeting: Shareholders Reinstate Existing Board
In a speedy and virtual annual meeting Wednesday morning, Kohl’s shareholders approved the reelection of the 13 existing board members.
In doing so, a majority of the shareholders, the company said, rejected the slate of 10 directors that had been proposed by activist shareholder Macellum Advisors. The existing directors were reelected for one-year terms.
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The results announced are considered preliminary until final results are tabulated and certified by the independent Inspector of Elections. The final certification of results will be filed as a Form 8-K with the U.S. Securities and Exchange Commission and will be on Kohl’s investor website.
Michelle Gass, chief executive officer, among those present at the meeting, made no comments, nor were any questions received from shareholders during the meeting, which lasted about six minutes.
“We would like to thank our shareholders for their support throughout this proxy contest,” said Peter Boneparth, chairman of the Kohl’s board. “While we have had differences with Macellum, this board is committed to serving the interests of all our shareholders. The board remains focused on running a robust and intentional review of strategic alternatives while executing our strategy to drive shareholder value. We appreciate the feedback we have received from our shareholders over the past several months and look forward to engaging with them further.”
In addition to Boneparth, Kohl’s board members are Michael Bender, Yael Cosset, Christine Day, H. Charles Floyd, Michelle Gass, Margaret Jenkins, Thomas Kingsbury, Robbin Mitchell, Jonas Pricing, John e. Schlifske, Adrianne Shapira, Frank V. Sica and Stephanie A. Streeter.
Courtesy Photo
Macellum, which owns nearly 5 percent of Kohl’s Corp., put heat on the retailer by nominating 10 candidates to the board of directors. The nominees included Jonathan Duskin, Macellum’s CEO and managing partner, as well as Pamela Edwards, chief financial officer and executive vice president of Citi Trends and board member at Neiman Marcus Group, and Jeffrey Kantor, president of JAK Consulting and former Macy’s chief merchandising officer and chief stores officer, and former chairman of macys.com.
Macellum has been critical of Kohl’s management and financial performance, and has been pressuring the company to raise shareholder value, possibly through a sale of the business, or sale leasebacks of properties.
Kohl’s has rejected sale-leasebacks and is considering several proposed bids for the company, with the assistance of Goldman Sachs. Acacia Research Corp., Leonard Green & Partners, Sycamore Partners and Hudson’s Bay Co. are said to be among the bidders. Simon Property Group in association with Brookfield was said to also be a potential bidder, but David Simon this week seemed to throw cold water on that idea.
At Simon’s annual meeting on Monday, David Simon chairman, CEO and president, didn’t specifically address reports of his company’s purported bid for Kohl’s, “We’re really, really focused internally.”
Kohl’s has enacted a poison pill to make a takeover more expensive.
For months, Macellum has been pushing for changes at Kohl’s. Last year, Macellum was successful in getting two individuals of its choice placed on the board, and a third person was added to the board by mutual agreement between the activist and Kohl’s. Macellum had hoped to completely overhaul the Kohl’s board.
Kohl’s fourth-quarter net income, impacted by inventory shortages, slowed traffic due to Omicron and some tax implications, declined 13 percent to $299 million, from $343 million in the year-ago period. Net income in the 2020 quarter had a big tax benefit.
Operating income, which eliminates the impact of the tax difference, was up 42 percent to $450 million in the last quarter, from $316 million in the 2020 quarter.
For the year, however, the net reached $938 million, compared to a loss of $163 million in 2020, which was more heavily impacted by the pandemic.
On the revenue side, there was a 5.8 percent gain to $6.5 billion in the fourth quarter. For the year, revenues were $19.43 billion, below the $19.97 billion generated in 2019, and ahead of the $15.96 billion generated in 2020.
Kohl’s restructuring efforts have centered around becoming more of a destination for active and casual merchandise and special sizes, while reducing the dependence on women’s fashion brands. The retailer has also been aggressively rolling out Sephora shops inside its stores, while also selling Sephora on kohls.com.
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