An activist investor renews a push to get department store chain Kohl's Inc. KSS -1.93% to take measures to increase its backlog.
Macellum Advisors GP LLC, which has a 5% stake in Kohl's, has urged the company to make changes, including changing the board, said people familiar with the matter. Kohl's has so far rejected Macellum's request to add directors with detailed experience or a shareholder to the board, the people said. The New York Hedge Fund, which was part of a group that ran a proxy fight at the dealership last year, now expects to do it again.
Kohl's shares rose in the first months of 2021, but have fallen about 20% since activists reached a settlement agreement in April 2021 and are trading below where they were two decades ago. Menomonee Falls, Wis., Has a market capitalization of about $ 7.2 billion.
Macellum tells Kohl's that if it does not change the board, the company should hire bankers to investigate a sale or other transaction. Macellum has told the company that it believes there are potential buyers who have shown interest.
Kohl's said in a statement that they are continuously exploring all options to maximize shareholder value and that its strong performance in 2021 showed that its strategy works. It said it plans to share more details about its strategic initiatives and capital allocation plans on its investor day on March 7.
Late last year, another activist hedge fund, New York-based Engine Capital LP, said it owned a stake of about 1% and urged Kohl's to investigate a sale.
Over the past year, Kohl's has made a number of changes, including the reinstatement of dividends and increased share buybacks. It is also investing in its new partnership with cosmetics chain Sephora, updating more than half of its more than 1,000 stores.
Macellum, which focuses on retail, nominated nine directors early last year along with three other activists - including Macellum's CEO Jonathan Duskin - and urged Kohl's to monetize its property and make changes to its operations. Kohl's has said it has previously concluded that such sale-leasebacks for their real estate would not add value.
The group later reached a settlement agreement as Kohl's share was on the rise, putting two of its nominees and a third director on the board. The deal prevented Macellum and the other firms from agitating in the company until last week.
The window to nominate directors for Kohl's board of directors opened on January 12 and closes in mid-February.
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