Activist Investors Scale Back Effort To Control Kohl's Board

A group of activist investors who sought to take control of the 12-person board of directors at Kohl’s Corporation KSS have changed their plans by presenting five nominees instead of a previously announced slate of nine.

The company denounced their plans, claiming the candidates lacked the experience needed to serve as directors.

What Happened: The activist investors group includes Macellum Advisors GP LLC, Ancora Holdings Inc., Legion Partners Asset Management LLC and 4010 Capital LLC, which control a combined 9.5% stake in the retailer. The group blamed Kohl’s leadership for creating what they viewed as a dismal retail strategy that resulted in evaporating profits and flaccid stock performance.

The group’s plan to nominate nine members to sit on Kohl's board was reduced to a five-person slate. While the group didn't explain why this shift in action, they issued a statement blaming Kohl's for trying to "distract shareholders into believing our campaign is about "seizing control' of the Company or the Board."

The nominee put forth include Jonathan Duskin, a principal of Macellum; Margaret Jenkins, a former chief marketing officer at Denny’s Corporation DENN and El Pollo LoCo Holdings LOCO; Jeffrey Kantor, former chief merchandising officer and chief stores and human resources officer at Macy’s Inc. M and former chairman of Macys.com; Thomas Kingsbury, former CEO of Burlington Stores Inc. BURL; and Cynthia Murray, former president of Chico’s FAS CHS.

What Happened Next: Kohl’s responded to the group’s announcement by issuing a press statement accusing them of being “focused on short-termism and financial engineering at the expense of sustainable operating and financial success.”

The company claimed this effort was meant to “disrupt Kohl's strong business momentum” and accused the slate of candidates of lacking “critical relevant experience.”

“One of their nominees has presided over four companies that filed for bankruptcy,” said the company in its statement. “Three of their five nominees have not served on boards of retail companies of a comparable size to Kohl’s. Two of the nominees have never served on a public company board. Finally, four of five of the Activists’ nominees lack meaningful digital experience, an area critically important to Kohl’s future growth, now representing 40% of our business.”

What’s Coming Up: Kohl’s added that it planned to meet with the group next week, adding it “will continue to engage in good faith with the Activist Investors with the objective of finding common ground that serves the interest of all shareholders.”

Kohl’s shares closed today at $57.22, up 0.03%.

(Photo courtesy Kohl’s in Trumbull, Connecticut.)