Kohl’s Corp.
KSS -3.05%
shareholders rejected an activist investor’s push to replace up to 10 directors, endorsing the existing board as the retailer is exploring a potential sale.
The company said Wednesday that its slate of 13 directors were all re-elected according to a preliminary tally of votes at its annual shareholder meeting.
Kohl’s has been under pressure from activist investor Macellum Advisors GP LLC, which has urged it to make changes that include selling and leasing back real estate as well as selling the entire company.
Kohl’s is in the process of evaluating offers from bidders. Private-equity firm Sycamore Partners and Canada’s Hudson’s Bay Co. are among those considering deals for the retailer, The Wall Street Journal has reported.
The big proxy advisory firms whose recommendations can hold a lot of sway were divided. Institutional Shareholder Services Inc. backed the activists, while Glass Lewis recommended that shareholders vote for all 13 of the retailer’s nominees, including its chief executive,
Michelle Gass.
Kohl’s had been struggling before the pandemic. Its operating margin fell to 6.1% in 2019 from 11.5% in 2011, while its sales were little changed. Then the coronavirus pandemic hit, taking a big toll on sales and wiping out profits in 2020.
Sales and profits rebounded in 2021. But by January 2022, the retailer’s stock was worth less than it was two decades ago. On Tuesday, the shares closed at $49.39, giving the company a market capitalization of about $6 billion.The stock was down about 1% in early Wednesday trading.
Kohl’s is set to report its first-quarter results on May 19.
Since taking the helm of Kohl’s in May 2018, Ms. Gass has forged partnerships with
Amazon.com Inc.
and Sephora, brought in new brands and beefed up its loyalty program.
Macellum contends those moves haven’t added enough value.
In 2020, Macellum joined with other activists, including Ancora Holdings Inc., Legion Partners Asset Management LLC and 4010 Capital LLC, in nominating nine directors to the Kohl’s board, which then had 12 members. In a settlement in April 2021, Kohl’s agreed to add two directors from the activists’ slate and one independent director who received the blessing of the investor group.
—Cara Lombardo contributed to this article.
Write to Suzanne Kapner at [email protected]
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