The Kohl’s logo is placed on the exterior of a Kohl’s store on January 24, 2022 in San Rafael, California.
Justin Sullivan | Getty Images
Kohl shareholders voted to re-elect the company’s current 13 board members as the retailer faced increasing pressure from activists for an overhaul, the company announced on Wednesday.
Kohl’s shareholders’ annual meeting came as activist firm Macellum Advisors pushed for Kohl’s to revise its list of directors, arguing that the company has underperformed other retailers in recent years.
Macellum has argued that efforts by Kohl’s chief executive officer Michelle Gass, like working with beauty retailer Sephora or working with Amazon on a returns program, weren’t enough.
In February, Macellum appointed 10 directors, including its chief executive officer, Jonathan Duskin. The activist has also pushed for Kohl’s to sell itself and sell and lease back some of its properties to raise additional capital.
Kohl’s has resisted such sale-leaseback deals, but the retailer has tapped into Goldman Sachs bankers to evaluate offers. Kohl’s confirmed in March that it had received multiple tentative takeover bids after rejecting a $64-a-share bid from Acacia Research, backed by Starboard, that it deemed too low.
Kohl’s shares closed at $49.39 on Tuesday, compared to a 52-week high of $64.80. The stock lost more than 1% in early trading on Wednesday.
Ahead of Wednesday’s vote, the major proxy advisory firms were divided on their recommendations. Institutional Shareholder Services, or ISS, supported Macellum, while Glass Lewis said shareholders would be best served by supporting Kohl’s current board.
This isn’t the first time Macellum has put pressure on Kohl either. The pair agreed in April 2021 to add two directors from a list pushed for by a group of activists that included Macellum. Kohl has also appointed an independent director with the support of activists.
Kohl’s board “remains focused on conducting a robust and focused review of strategic alternatives,” said Chairman Peter Boneparth.
“Although we have had differences with Macellum, this board has a duty to serve the interests of all of our shareholders,” he said.
And though Macellum didn’t win the vote, the activist firm says it won’t stay silent.
“I think the vote was a referendum on a sale, and people who voted for the company bought the narrative that any board change in the middle of this process risks disrupting the process,” Duskin told CNBC .
“The vote for the company was a vote for the sale of a company,” he said. “We’re not going away.”
– CNBC’s Courtney Reagan contributed to this coverage.