Macellum Advisors Urge Kohl’s to Bolster Failing Stocks or Sell

Kohl’s is facing demands from Macellum Advisors to bolster its failing stocks or pursue avenues to sell the company, The Wall Street Journal (WSJ) reported Monday (Jan. 17).

According to the WSJ, Macellum — which holds around 5% stake in Kohl’s — has urged the company to make several changes, including adding shareholders or directors with retail experience to the board.

Kohl’s has been unreceptive thus far, but the hedge fund plans to try again. According to Macellum, if Kohl’s doesn’t change its board, the company ought to hire bankers to explore a sale. Macellum told Kohl’s that there are potential buyers that have expressed interest in the idea.

In a statement, Kohl’s said it looks at all opportunities and that the performance it had from 2021 showed the strategy was working.

Kohl’s shares were up for several months in early 2021, though they’ve been trending downward now, with the activists reaching a settlement agreement in April 2021. The company said it planned to share details about its strategic initiatives as of March 7, its investor day.

Macellum, alongside other activist investors with a stake in Kohl’s, nominated nine directors early last year, urging Kohl’s to monetize its real estate and make changes to the way it worked.

Kohl’s reinstated several changes over the past year and bolstered its share repurchases, and it has invested in a new partnership with Sephora, updating over half of its over 1,000 stores.

Last month, PYMNTS reported on the demands to spin off Kohl’s, which has seen friction amid a shift to omnichannel retailing, with activist investor Engine Capital saying it wanted to see a split between the physical and retail businesses.

Related: Breaking Up Kohl’s Is About Valuation, Not Excellent Omnichannel Retail Execution

PYMNTS noted the disconnect between the Wall Street sum of its parts value extraction and the work for those on the front lines who work on sourcing goods and garments and displaying them.

Engine Capital has said its main reasons for wanting the split come down to a lack of value for shareholders.