A group of activist investors with a combined 9.5 percent stake in Kohl’s Corp. on Thursday reduced the number of directors it plans to nominate to the retailer’s board from nine to five, according to a filing with the Securities & Exchange Commission.

The group, which includes Macellum Advisors and Ancora Holdings, had last month nominated a slate including former executives of Macy’s Inc and Burlington Stores to Kohl’s board, in what it called an effort to add more retail experience to the company’s leadership and improve profitability. Kohl’s rejected the initial move, calling it an attempt to “seize control” of its 12-member board.

In its latest statement, the activist group seeks to replace five current board members that they said: “are the least qualified to continue serving.” The five are Steven A. Burd, Jonas Prising, John E. Schlifske, Frank V. Sica, and Stephanie A. Streeter.

The group filed a revised proxy statement regarding its nominations. The group has also created a website, here.

The Investor Group issued the following statement: “Today we have identified the five incumbent directors who we believe are the least qualified to continue serving on the Board: Steven A. Burd, Jonas Prising, John E. Schlifske, Frank V. Sica, and Stephanie A. Streeter. Since we initially nominated candidates in January, our goal has always been to assemble the best Board possible to help Kohl’s reach its full potential. To that end, we originally nominated nine highly qualified individuals in hopes of working constructively with the Board to choose from a large pool of candidates to construct a well-balanced Board with the attributes and skillsets to create shareholder value.

“Rather than engaging in meaningful discussions, however, Kohl’s has tried to distract shareholders into believing our campaign is about “seizing control” of the Company or the Board. To be clear – our campaign is to construct the strongest possible Board with directors who possess relevant retail, capital allocation, strategy, and corporate governance expertise – and who will also serve as strong advocates for shareholders.

“In the absence of meaningful progress towards a resolution in advance of a proxy campaign commencing, we have filed revised preliminary proxy materials announcing our slate of five highly qualified directors to run in opposition to five of the Company’s long-tenured directors who we believe do not have the relevant retail and governance skills to create shareholder value. Collectively, we believe these five individuals should be held accountable for overseeing a decade of stagnant growth and poor shareholder returns. We are also concerned with the results of our background checks on certain of these individuals.

“In contrast, each of our nominees was selected for their specific retail expertise that corresponds to issues that have historically plagued the Company and for their intense focus on creating long-term, sustainable, shareholder value. Further, they represent a diverse collection of successful executives. Our slate of nominees now consists of the following:

  • Jonathan Duskin – As a principal of Macellum, Mr. Duskin brings the perspective of a large shareholder and a sense of urgency that is sorely lacking on the Board. Mr. Duskin also has strong strategic and capital allocation skills, including cost-cutting, sale-leaseback transactions and share repurchase programs. Mr. Duskin also has a successful track record for creating long-term, sustainable value in the retail sector, including at Citi Trends, Bed Bath & Beyond and Big Lots.
  • Margaret Jenkins – Ms. Jenkins has an extensive background in consumer marketing and retail advertising, having served as Chief Marketing Officer at Denny’s Corporation and El Pollo Loco, among others. Her significant marketing experience would be helpful to streamline and fix Kohl’s long-beleaguered loyalty and rewards programs. Ms. Jenkins also has significant apparel retail experience from serving as a director at PVH Corporation and Citi Trends, during periods of significant value creation.
  • Jeffrey Kantor – Mr. Kantor spent 36 years at Macy’s Inc., holding numerous senior leadership roles, including Chief Merchandising Officer, Chief Stores & Human Resources Officer and Chairman of macys.com. As such, he has been a leader in the discretionary retail arena for decades and is uniquely positioned to help oversee a plan of attack against Kohl’s many competitors. Mr. Kantor was also President of Macy’s home store and will bring meaningful insights to a category that Kohl’s, by their own admission, has struggled with.
  • Thomas Kingsbury – Mr. Kingsbury, as the former Chief Executive Officer of Burlington Stores, has led one of the most successful turnarounds of a retailer in the last two decades. A turnaround that likely took material share from Kohl’s during his leadership. Mr. Kingsbury has an exceptional record of creating shareholder value and is well-versed in every functional area of retailing. Mr. Kingsbury also serves as a director of Tractor Supply Company and Big Lots, among others. During his tenure at these companies, he has overseen the creation of substantial shareholder value.
  • Cynthia Murray – Ms. Murray has extensive merchandising experience in Ladies’ apparel and accessories, a segment that Kohl’s, by their own admission, has struggled with for many years. During her tenure as President of Chico’s, the company saw multiple years of increasing same-store sales and improving profitability. Ms. Murray can make a significant contribution to oversee a customer-centric process that will result in Kohl’s finally understanding and delivering what this underserved female customer wants.

We intend to run these candidates against the following incumbent directors:

  • Steve Burd – Mr. Burd has served as a director since 2001. Over this time frame, Kohl’s has experienced material underperformance. In our view, Mr. Burd’s background as the former Chief Executive Officer of Safeway Inc. (eight years ago) gives him little relevant experience to help solve the issues that Kohl’s is struggling within merchandising, reward programs, marketing and sourcing. Mr. Burd also serves on the Compensation Committee.
  • Jonas Prising – Mr. Prising has served as a director of Kohl’s since 2015 and is Chairman of the Compensation Committee, a role he has held since 2019. The Investor Group has significant concerns with the Company’s executive compensation structure, including that the Company has historically paid its executives based on targets that have been lowered from prior years. As Chair of the Compensation Committee, we believe Mr. Prising should be held accountable for this misalignment in compensation to executives for deteriorating results. The Investor Group also does not believe his experience, as Chief Executive Officer of ManpowerGroup, a staffing firm, is relevant retail experience to address Kohl’s underperformance.
  • John Schlifske– Mr. Schlifske has served as a director since 2011. Over this period, Kohl’s has failed to create shareholder value and has systemically missed its own stated objectives. Mr. Schlifske has spent most of his career at Northwestern Mutual Life Insurance Company and is currently its Chairman and Chief Executive Officer. We struggle to understand the relevant retail skillset he brings to Kohl’s given his background in insurance and investments.
  • Frank Sica – Mr. Sica has served as a director since 1988 and as Chairman of the Board since 2018. Given his 33 year tenure, we believe Mr. Sica has lost his independent perspective. We also find Mr. Sica’s career as an investment banker and private equity investor to lack the requisite retail operational experience necessary to oversee a turnaround of Kohl’s. Further, given Mr. Sica’s background, we are surprised that so little was done under his leadership to create value through non-operational areas like balance sheet optimization and capital allocation. Mr. Sica also served as the prior Chair of the Compensation Committee from 2008 to 2019.
  • Stephanie Streeter – Ms. Streeter has served on the Board since 2007 and is currently Chair of the Audit Committee. As the former Chief Executive Officer of Libbey, Inc, a glassware manufacturer, the Investor Group does not believe Ms. Streeter brings relevant retail experience necessary to oversee the turnaround of Kohl’s. Further, as the Audit Committee’s Chair since 2017, we believe Ms. Streeter should bear responsibility for overseeing the creation of financial plan and shareholder guidance that the Company has been repeatedly unable to achieve.

“We remain open to constructive dialogue with the Company aimed at achieving a positive resolution for all Kohl’s shareholders. However, we are convinced that based on the Company’s historical underperformance, without significant Board change, Kohl’s will continue to miss the mark with its customers and be unable to bring cost cuts to the bottom line or efficiently allocate capital, resulting in shareholders continuing to suffer subpar long-term return.”