Kohl’s Corporation, the Wisconsin-based department store chain, has rejected the proposals and director nominations put forward by a group of investors, which collectively owns a 9.5% stake in the company. The investor group, consisting of Macellum Advisors GP, LLC; Legion Partners Holdings, LLC; Ancora Advisors, LLC; and 4010 Capital, LLC, announced their measures to turn the business around and increase its stock price.

The investor group’s proposals include appointing nine new directors to take control, reducing inventory levels, cutting executive compensation, and selling non-core real estate. They also suggest implementing a $3 billion sale-leaseback program and a large-scale share repurchase program to enhance stock prices.

However, Kohl’s has rejected the attempt by the investor group to take control of the board. They emphasize that they are already implementing a strong growth strategy and have added six new independent directors to the board since 2016. While they appreciate the suggestions made by the investor group, they believe that some of the proposed initiatives would not be beneficial for their shareholders. They mention that they have been in discussions with the investor group since December but had only recently received detailed proposals.

Kohl’s highlights that their own strategic plan aligns with several of the investor group’s proposals, including sale-leaseback transactions carried out during the pandemic. They state that they are focused on accelerating top-line growth by developing a transformative beauty business with Sephora, expanding their active business, revitalizing their women’s business, and investing in omnichannel capabilities. Kohl’s mentions that investors and analysts have responded positively to their plans.

Due to stiff competition from retailers like Walmart, Target, and Amazon, Kohl’s was already facing challenges before the pandemic. The disruptions caused by the coronavirus crisis have further impacted the company, leading to a 25% decline in total revenues to $9.8 billion and a loss of $506 million in the nine-month period ending October 31, 2020.

Currently, Kohl’s operates over 1,100 stores across 49 states.

Useful links:
Kohl’s Official Website
Kohl’s SEC Filings