Kohl’s Corp., in response to an open letter from an investor group seeking board changes at Kohl’s, issued a statement rejecting what it characterized as the investor group’s attempt to seize the company’s board of directors.
The investor group— including Macellum Advisors GP, Legion Partners Holdings, Ancora Advisors and 4010 Capital— announced the nomination of a slate of nine directors for election to the Kohl’s board company’s that it readied for a vote at the company’s 2021 annual shareholders meeting.
Kohl’s stated that it is committed to maintaining constructive engagement with all shareholders regarding the company’s strategies and prospects, maintaining that the management team has been engaged in discussions with the investor group since early December, adding that it remains open to new ideas that will improve operating performance and capital allocation.
Kohl’s also rejected the investor group’s attempt to seize control of the company board and to disrupt operational momentum, especially considering, it noted, that the company is implementing a growth strategy and accelerating performance. Kohl’s has refreshed half its board with six new independent directors since 2016, the company pointed out.
The strategic plan the investor group unveiled with its letter was the first to share details about the group’s plans to create value. Kohl’s said the investor group plan included several initiatives the company already has begun and other ideas that would not be accretive to shareholder value.
Other points Kohl’s made in its statement to demonstrate the company’s progress include:
- The board and management team announced in October 2020 a new vision and long-term strategic framework to accelerate our growth and profitability based on the company’s move to be the most trusted retailer of choice for the active and casual lifestyle, with a goal of expanding operating margin to 7% to 8%.
- The company has established a new long-term partnership with Sephora, intended to make Kohl’s a leading beauty destination and accelerate our growth and profitability.
- Investments over the past three years in stores, digital, technology, supply chain and marketing capabilities continue transformation of the business and position Kohl’s for future growth as well as drive traffic and customer grow customer base.
- Omnichannel initiatives have enhanced customer experiences including buy online, pickup in store, buy online, ship to store, store drive up and Amazon Returns.
The company noted that it already is making progress with its strategy, with strong third-quarter and preliminary fourth-quarter earnings that exceeded expectations. In both quarters, Kohl’s delivered sequential sales improvement, a better than expected gross margin rate and strong SG&A expense management, all of which further strengthened the company financial position, it indicated.