Are executive departures at Kohl’s a sign of things to come?
Kohl’s is losing two key executives at a time when the retailer is pursuing a sale and facing ongoing pressure from activist investors who see an opportunity to maximize the return on their shares with little apparent concern for the chain’s prospects beyond the next quarter.
Doug Howe, Kohl’s chief merchandising officer is the first out the door, departing immediately, according to a securities filing reported by CNBC and other news organizations. Greg Revelle, chief marketing officer, will leave the company on June 1.
Both executives are exiting to pursue other opportunities, according to a statement by Kohl’s.
The retailer expressed confidence that its merchandising and marketing efforts will stay on track with the departures of Messrs. Howe and Revelle.
“A search for the replacements is already underway,” Kohl’s said. “In the meantime, we have a deep bench of marketing and merchandising talent that will ensure the continued execution of our strategies.”
Kohl’s has gotten off to a rocky start in 2022. The retailer today reported its first quarter results that showed net and comp sales falling 5.2 percent. The chain’s gross margin fell 69 basis points from the first quarter last year. Diluted earnings came in at 11 cents a share.
“The year has started out below our expectations. Following a strong start to the quarter with positive low-single digits comps through late March, sales considerably weakened in April as we encountered macro headwinds related to lapping last year’s stimulus and an inflationary consumer environment,” Kohl’s CEO Michelle Gass said in a statement.
Kohl’s executive leadership and board of directors have been under continuing pressure from activist investors including Macellum Advisors over the past year.
Kohl’s shareholders earlier this month rejected a bid by Macellum to replace up to 10 of the retailer’s 13 board directors. Macellum, which owns about five percent of Kohl’s, has advocated for the retailer to spin off its real estate assets and its e-commerce operations. It has also advocated for a sale of the company.
The retailer has been engaged in reviewing bids that have come from Franchise Group, Hudson’s Bay, Simon Property Group and Brookfield Property Partners, and Sycamore Partners. It rejected a bid in January by Acacia Research Group, part of Starboard Value, that it determined was too low. More than 25 companies have reportedly expressed interest in acquiring Kohl’s.
- Kohl’s says two top executives are leaving, as company seeks buyer – CNBC
- Kohl’s loses two senior executives as it looks for a buyer – Reuters
- Kohl’s says 2 executives are leaving the company; retailer set to report earnings on Thursday – Milwaukee Journal Sentinel
- Kohl’s Reports First Quarter Fiscal 2022 Financial Results – Yahoo Finance
- Will Kohl’s make a better deal for itself after an activist investor loses board vote? – RetailWire
DISCUSSION QUESTIONS: Do you see the departures of c-suite executives as a sign of bigger problems at Kohl’s? What should Kohl’s leadership do at this time to maintain morale in its corporate offices and frontline locations?