Will Kohl’s make a better deal for itself after an activist investor loses board vote?
Kohl’s shareholders in a vote yesterday rejected a bid by the activist investor Macellum Advisors to replace up to 10 of the retailer’s 13 board directors.
Macellum, which owns about five percent of Kohl’s, has criticized the retailer as a laggard among its peers in the industry and has advocated for the company to spin off its real estate assets and its e-commerce operations. It has also advocated for the retailer to seek a sale.
“We would like to thank our shareholders for their support throughout this proxy contest,” Peter Boneparth, chairman of the Kohl’s board, said in a statement. “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.”
Kohl’s has been engaged in reviewing bids for the chain that began coming in unsolicited in January. Acacia Research Group, part of Starboard Value, was the first acknowledged bid for Kohl’s with an offer reported to be in the neighborhood of $9 billion.
Franchise Group, owner of Vitamin Shoppe, Hudson’s Bay, the parent of Saks Fifth Avenue, Simon Property Group and Brookfield Property Partners, mall operators and co-owners of JCPenney and other retailers, and Sycamore Partners are among more than 25 companies that have reportedly expressed interest in acquiring the chain.
Kohl’s, which saw its business tank in 2020 due to the pandemic, rebounded last year to post record full year adjusted diluted earnings per share of $7.33, surpassing its previous high of $5.60 in 2018.
The company has forecast net sales to increase two to three percent over 2021 with operating margins between 7.2 and 7.5 percent.
Kohl’s plans to roll out 100 smaller, hyper-localized stores over the next four years. The new stores measure around 35,000 square feet versus the company average of 80,000.
The retailer earlier this month introduced a new Kohl’s Rewards program enhancement that will offer members using the retailer’s credit card a 7.5 percent reward on each purchase, up from five percent.
“Customers love our simplified Kohl’s Rewards program that leverages personalized offers and Kohl’s Cash,” Greg Revelle, Kohl’s chief marketing officer, said in a statement. “We partnered closely with store associates and customers to understand how we could make our benefits even more robust.”
- Kohl’s Shareholders Re-elect All Directors at 2022 Annual Meeting – Kohl’s
- Kohl’s receives an unsolicited buyout bid, others may follow – RetailWire
- Are JCPenney’s owners a good fit to take over Kohl’s? – RetailWire
- Will smaller, more localized stores work for Kohl’s? – RetailWire
- Kohl’s Enhances Rewards Program Nationwide with Increased 7.5% Earn Rate – Kohl’s
DISCUSSION QUESTIONS: Did Kohl’s shareholders make the right decision in not adding 10 new board members put forward by Macellum Advisors? Should Kohl’s board consider any criteria other than the highest offer in selecting a new owner?