The Kohl logo was displayed on the exterior of a Kohl store on January 24, 2022 in San Rafael, California.
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Kohl shareholders voted to re-elect the current list of 13 directors on the company’s board as the retailer faced growing pressure from overhaul activists, the company said Wednesday.
Kohl’s annual shareholders’ meeting took place as activist Macellum Advisors urged Kohl’s to revise its list of directors, arguing that the company had performed less well in recent years than other retailers.
Macellum says Kohl CEO Michelle Gus’s efforts, such as working with beauty retailer Sephora or modeling with Amazon on a return program, have not been enough.
In February, Macellum nominated 10 directors, including CEO Jonathan Duskin. The activist also insists that Kohl’s sell and sell part of its real estate and rent it out in order to benefit from additional capital.
Kohl’s opposed similar sale and leaseback deals, but the retailer turned to Goldman Sachs bankers to evaluate the offers. Kohl’s confirmed in March that it had received a number of preliminary buyout offers after rejecting an offer from Starboard-backed Acacia Research at $ 64 a share, which is considered too low.
Shares of Kohl closed at $ 49.39 on Tuesday, compared to a 52-week high of $ 64.80. Shares fell more than 1% at the start of trading on Wednesday.
Ahead of Wednesday’s vote, key consulting firms were divided on their recommendations. Institutional Shareholder Services, or ISS, backed Macellum, while Glass Lewis said shareholders would be best served by supporting Cole’s current board.
This is not the first time Macellum has put pressure on Kohl’s. The two struck a deal in April 2021 to add two directors to a list demanded by a group of activists, including Macellum. Kohl also appointed an independent director with the support of activists.
Kohl’s board “remains focused on conducting a stable and deliberate review of strategic alternatives,” said Chairman Peter Bonepart.
“While we had differences with Macellum, this board is committed to serving the interests of all our shareholders,” he said.
And until Macellum wins the vote, the activist firm says it will not remain silent.
“I think the vote was a referendum on the sale, and the people who voted for the company bought the story that any changes to the board in the middle of the process ran the risk of disrupting the process,” Duskin told CNBC.
“The vote for the company was a vote to sell a business,” he said. “We’re not leaving.”
– CNBC’s Courtney Reagan contributed to this report.
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