AP

Activist investor continues push for Kohl’s board shake-up

Oct 12, 2022, 8:24 PM | Updated: Oct 13, 2022, 8:57 am

FILE - A shopper arrives at a Kohl's store in West Des Moines, Iowa, on Feb. 25, 2021. The activist...

FILE - A shopper arrives at a Kohl's store in West Des Moines, Iowa, on Feb. 25, 2021. The activist investor who has been pressing Kohl's for changes to turn around its struggling operations has upped the ante and is now attempting to shake up the board, according to a letter Thursday, Oct. 13, 2022. (AP Photo/Charlie Neibergall, File)

(AP Photo/Charlie Neibergall, File)

NEW YORK (AP) — An activist investor that has been pressing Kohl’s for a new strategy to turn around struggling operations is again attempting to shake up the department store’s board.

Macellum Advisors GP, LLC, which controls nearly 5% of the outstanding common shares of Kohl’s Corp., wants some long-term directors ousted, including Chairman Peter Boneparth. Macellum said Boneparth is part of a “shadow board.”

“The Shadow Board is failing to adequately support Kohl’s senior management, which has resulted in the destruction of billions of dollars of shareholder value recently and perpetual stagnation over the long-term,” Jonathan Duskin, a managing partner at Macellum, wrote in a letter to shareholders made public Thursday.

Yet five months ago shareholders rejected all the board nominees backed by Macellum, including Duskin, voting instead for the current board during the company’s May annual meeting.

Duskin wrote Thursday that the vote may have gone differently if shareholders had been aware of what he called the true degree of business deterioration at Kohl’s, senior executive departures and details of a failed attempt to sell the department store. But, he said, Macellum has attempted to avoid becoming a distraction, instead working privately with the board over the past couple of months.

After the resounding defeat in May, Kohl’s said Thursday that it is disappointed that Macellum, has launched a “disruptive public campaign for the third time.” The company said that it has regularly engaged with Macellum over the past two years to listen.

“These engagements have been unproductive and a distraction from running the business during a challenging retail environment,”Kohl’s said. “The board and management remain committed to maximizing value and acting in the interests of all our shareholders by staying focused on running the business.”

Last year, Macellum nominated nine directors. In a settlement in April 2021, Kohl’s agreed to add two directors from the activists’ slate, along with an independent director.

In August, the Menomonee, Wisconsin, chain slashed its sales and profit expectations for the year after being forced to cut prices to shed unwanted merchandise. The department store also cut back on orders ahead of the critical holiday period.

Kohl’s was not alone, with even chains that have thrived in recent years, Walmart and Target, forced to slash inventories after consumer behavior shifted radically over the past year.

Yet Kohl’s has struggled for years.

Last month, activist investor Ancora Holdings Group pushed for the removal of both Chairman Boneparth and CEO Michelle Gass for what it calls a botched strategy and dramatic sales declines.

Ancora, which owns 2.5% of outstanding shares in Kohl’s, has been able to get three of its directors installed on the board.

The Wall Street Journal was first to report on Macellum’s latest board push.

Shares of Kohl’s were essentially flat, Thursday, but are down about 50% this year.

______

Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Early phases of Iran's drone attack against Israel. (Photo: Getty Images)...

Associated Press

The Latest | Iran launches its first direct military attack against Israel

Iran launched its first full-scale military attack against Israel on Saturday, sending drones toward Israel.

18 hours ago

Early phases of Iran's drone attack against Israel. (Photo: Getty Images)...

Associated Press

BREAKING: White House confirms Iran drone attacks towards Israel

JERUSALEM (AP) — The White House says it will provide unspecified support for Israel’s defense against an ongoing airborne attack from Iran. National Security Council spokesperson Adrienne Watson said in a Saturday statement that “Iran has begun an airborne attack against Israel.” She added: “The United States will stand with the people of Israel and […]

18 hours ago

Image: O.J. Simpson attends his parole hearing at Lovelock Correctional Center July 20, 2017 in Lov...

Associated Press

O.J. Simpson, fallen football hero acquitted of murder in ‘trial of the century,’ dies at 76

O.J. Simpson, the former NFL star and Hollywood actor who was acquitted of charges he killed his ex-wife and her friend has died at 76.

3 days ago

Southwest Airlines boeing...

Associated Press

An engine cover on a Southwest Airlines plane rips off, forcing the flight to return to Denver

A Southwest Airlines jet, a Boeing 737, returned to Denver Sunday morning after the engine cover fell off and struck the wing flap during takeoff.

6 days ago

Image: The late Careaga family....

Associated Press

3 found guilty in 2017 quadruple killing of Washington family

A jury has found three men guilty of killing a family in Washington in 2017, crimes detectives asserted happened over drugs and money.

8 days ago

The logo for Boeing appears on a screen above a trading post on the floor of the New York Stock Exc...

Associated Press

Boeing’s CEO got compensation worth nearly $33M last year but lost a $3M bonus

Boeing's CEO got around $33 million in compensation, nearly all of it in stock awards, but his stock payout for this year will be cut.

9 days ago

Activist investor continues push for Kohl’s board shake-up