Activist Investor To Kohl's: Change Your Board Or Sell The Company

For the second time within a year, an activist investor is agitating for Kohl’s Inc. KSS to reanimate its lagging stock performance by either changing the membership of its board of directors or selling the company.

What Happened: The Wall Street Journal, citing unnamed “people familiar with the matter,” reported Macellum Advisors GP LLC, a 5% stakeholder in Kohl’s, has told the company’s leadership to bring in new directors to its board or begin consultations with bankers on the sale of the Menomonee Falls, Wisconsin-based company, which has more than 1,000 stores and a market value of around $7.2 billion.

In February 2021, Macellum was part of an activist investor group that tried to seize control of the 12-person Kohl’s board. An agreement with Kohl’s corporate leadership last April saw the addition of two new independent directors chosen by the group and a third independent director approved by the group. However, Kohl’s shares have fallen roughly 20% since that agreement was reached.

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What Else Happened: This is the second time within a month that an activist shareholder has urged Kohl’s to make operational changes. In December, Engine Capital LP – which owns about a 1% stake in Kohl’s – called on the company to either spinoff its e-commerce business or begin to consider selling the company. Engine Capital was not part of the attempt to remake the board last February.

The window to nominate directors to Kohl’s board opened on Jan. 12 and will close in mid-February. Macellum is expected to put forth a new slate of nominees for the board.

Photo: Kohl's in Trumbull, Connecticut.

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