Kohl’s responded to a call by Activist Investor Macellum Advisors to explore strategic options, including a sale, by reporting that its recent results showed the retailer is making strong progress with its transformation plan and that it’s open to further discussions with Macellum.
“As recently as this weekend, Macellum refused to enter a confidentiality agreement to hear about the company’s progress,” Kohl’s said in a statement in which it said it’s “positioned to exceed our key 2023 financial goals two years ahead of plan.”
The retailer said it would disclose its plans at the March 7 Investor Day.
As reported, Macellum, which owns 5 percent of Kohl’s stock, on Tuesday morning issued a statement calling on Kohl’s to sell itself or bring in new board members to improve its performance.
The statement came months after the department store chain reached a deal with activist investors, including Macellum, agreeing to add two of its nominees to Kohl’s Board as independent directors.
In its Tuesday letter, Macellum said Kohl’s had “recently rejected our private offer to collaborate on a broader Board refreshment.” The firm argued that without these changes, Kohl’s should sell itself or consider other strategic options, further noting that it heard that Kohl’s had “rebuffed overtures from credible buyers.”
Macellum also noted that Kohl’s shares were down 20 percent since settling with the group of investors in April 2021 to add new directors.
Kohl’s full statement follows:
Kohl’s Corporation today issued the following statement in response to Macellum Advisors GP, LLC’s (together with its affiliates, “Macellum”) press release and letter to shareholders.
We have continued to engage with Macellum since the settlement and are disappointed with the path they have taken and the unfounded speculation in their announcement and letter.
Based on our performance in 2021, we are positioned to exceed our key 2023 financial goals two years ahead of plan. We remain confident in our future and have accelerated our share repurchase activity. In 2021, we continue to expect to repurchase $1.3 billion in shares, reinforcing our commitment to driving shareholder value. We will discuss our 2021 results in more detail on our earnings call on March 1, 2022.
Looking ahead, we believe the continued execution of our strategy will position us to further improve our overall performance. We plan to share an updated financial framework and capital allocation strategy at our previously announced Investor Day on March 7, 2022.
Our refreshed Board of Directors has the skills and expertise to continue driving long-term value creation.
Our recently refreshed Board has the right mix of fresh perspectives, industry and financial expertise and institutional knowledge. As part of our agreement with the Investor Group, which included Macellum, following last year’s proxy contest, we added three independent directors to the Board, each with retail experience. In total, six new independent directors have joined Kohl’s Board in the last three years. These new directors bring highly relevant experience from top roles at leading retail companies including lululemon, Walmart, Burlington, and Kroger.
Kohl’s Board continuously evaluates value-enhancing opportunities and is committed to maximizing value for all shareholders.
Our Board has the deep financial and industry expertise necessary to evaluate all opportunities to enhance shareholder value. The Board regularly works with specialized advisors to evaluate paths that have the potential to create long-term value.
Our Board and management team will continue to aggressively pursue the best interests of all shareholders as we manage the business to increase shareholder value in both the near- and long-term.
Board and Management Refuse to be Distracted
The company has been open to engagement with shareholders, and after discussion with a larger group of shareholders last year agreed to certain Board level changes. As recently as this weekend, Macellum refused to enter a confidentiality agreement to hear about the Company’s progress across operating performance metrics, strategic initiatives and capital allocation plans, and provide input on these matters as a shareholder. They have been unwilling to constructively engage. The Board and management remain focused on sustained value creation. Distracting the Company from this focus does not benefit shareholders.
Photo courtesy AP
