Kohl’s Corp. has issued a statement in response to an activist investor group’s attempt to nominate five directors to its 12-member board.
In an announcement this afternoon, the retailer said the nominees put forth by the group — composed of Macellum Advisors GP LLC, Ancora Holdings Inc., Legion Partners Asset Management LLC and 4010 Capital LLC — lack “critical relevant experience” and “meaningful digital experience.” It added that its own directors “outmatch” the investors’ slate of nominees.
“Regardless of whether the activists are nominating five or nine directors, their capabilities and track records simply do not measure up,” the Menomonee Falls, Wis.-based company said in the statement. “Shareholders should reject the efforts of this slate to impose short-termism and financial engineering to disrupt the Kohl’s business strategy and our ongoing momentum.”
This morning, the activist investor group, which has a combined 9.5% stake in Kohl’s, announced that it had revised its proxy statement to nominate just five individuals to the board, versus its original nomination of nine candidates.
Kohl’s responded that all directors currently on the board have “extensive” experience in the retail or consumer-facing industries. (Four of them are either current or former CEOs.) It also wrote that one of the group’s nominees has presided over four companies that filed for Chapter 11 protection, while three have not served on boards of retail companies “of a comparable size to Kohl’s” and two have never served on a public company’s board.
“The Kohl’s board brings a diverse and relevant set of experiences well suited to support our continued momentum,” said the department store chain. It added that it has held “numerous meetings” with the activist investors and is scheduled to speak with the group again next week. “Kohl’s board and management team continue to be open to all ideas that can create value and will continue to engage in good faith with the activist investors with the objective of finding common ground that serves the interest of all shareholders.”
As part of its strategic plan announced in October, Kohl’s has targeted better operating margins at a level of between 7% to 8%. It has also forged a long-term partnership with beauty giant Sephora, expanded its contactless offerings and delivered a fourth-quarter earnings and sales beat.