After weeks of testy back and forth between Kohl’s and an activist investor group, a deal has been struck.
Under the terms of the agreement with Macellum Advisors GP LLC, Ancora Holdings Inc., Legion Partners Asset Management LLC and 4010 Capital LLC (The Investor Group) — which collectively own 9.3% of Kohl’s outstanding common stock — Kohl’s will add three directors to its board.
Two independent directors nominated by the investor group, Margaret Jenkins and Thomas Kingsbury, will join the board at the close of Kohl’s shareholder meeting on May 12. Christine Day will also become a director at that time. She was selected by Kohl’s, and the activists signed on to the choice.
Day, the former Lululemon chief, is co-founder and executive chairman of The House of LR&C, a fashion and sustainability-centric retail concept. Retail veteran Kingsbury, who was most recently president and CEO of Burlington Stores, serves on several key boards. Jenkins has been a director for clothing retailer Citi Trends Inc. as well as for PVH Corp.
Two Kohl’s board members are exiting: Steve Burd at the end of August, and Frank Sica next year.
Legion, Macellum, Ancora and 4010 Capital initially nominated nine directors in an attempt to take control of Kohl’s board. It revised its proxy statement in mid-March to nominate just five individuals. Early this month, Kohl’s urged shareholders to vote for the reelection of current members of its board at its annual meeting scheduled on May 12. The retailer refuted the groups’ claims that it was underperforming compared with the rest of the sector.
“Today’s agreement reflects our board’s ongoing dialogue with our shareholders and our commitment to maximizing long-term value for all stakeholders. We welcome the new directors and look forward to their perspectives as we continue to execute Kohl’s growth strategy,” said Kohl’s chairman Frank Sica in a statement.
Kohl’s CEO Michelle Gass added: “I look forward to working with our newly expanded board to further advance our transformative strategy and deliver results for shareholders. Amidst ongoing industry disruption and evolving consumer trends, we are uniquely positioned to build on our momentum and accelerate growth and profitability.”
The board also expanded its existing share repurchase authorization to $2 billion.