An Activist Investor is Pressuring Kohl’s to Consider Selling Itself

Macellum Advisors, which owns nearly 5% of shares at Kohl’s, is asking the company consider taking an offer to sell its business.

In an open letter to the Kohl’s board on Tuesday, the activist investor advised the company to strongly consider a sale of the company and also asked for Kohl’s to put a Macellum representative on the board.

“Though we believe Kohl’s could be a source of significant value with a significantly refreshed Board, improved execution and an optimized balance sheet, we feel the best risk-adjusted path forward for shareholders right now is a credible and open process to evaluate a full sale of the Company at an attractive premium,” wrote Macellum managing partner Jonathan Duskin in the letter.

The news comes a day after Kohl’s confirmed that it has received offers from two firms looking to acquire the company. Sycamore, a private equity firm, is looking to pay around $65 per share for Kohl’s, CNBC reported. Acacia Research also reportedly offered to pay about $64 a share for the department store chain. According to reports, both groups would aim to sell Kohl’s property to raise funds via a partnership with Oak Street Real Estate Capital.

“The Kohl’s Board of Directors will determine the course of action that it believes is in the best interests of the Company and its shareholders,” Kohl’s said in a statement. “Shareholders are not required to take any action at this time.”

Shares of Kohl’s were down almost 2% on early afternoon on Tuesday following a 36% surge on Monday on the news of the letters of interest. The buzz around Kohl’s fueled retail rivals as well. Nordstrom saw shares increase almost 13%, while Macy’s was up 18%.

Macellum Advisors last week sent another open letter to other shareholders to call out Kohl’s for “mismanaging” the business and “failing to implement necessary operational, financial and strategic improvements.”

Macellum entered into a settlement with Kohl’s last year, which involved two board seats and other changes. Recently, Macellum has said it believes that more shareholder representation is crucial to help Kohl’s do better. The investor also said it supports a move for the company to separate its digital and brick-and-mortar businesses into two separate entities, a recently popular move among traditional department store retailers.

In response to that letter, Kohl’s said in a statement that it has “continued to engage with Macellum since the settlement” and is  “disappointed with the path they have taken and the unfounded speculation in their announcement and letter.”

Access exclusive content