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Activist investor Ancora Holdings is pushing to remove Kohl’s chief executive and chairman, according to a Reuters report.
Ancora sent a letter to the board on Thursday asking for the replacement of CEO Michelle Gass and chairman Peter Boneparth. The company, which owns a 2.5% stake in Kohl’s, wants new management so the company can reorganize its operations.
“Kohl’s needs new leadership with a demonstrated track record in controlling costs, expanding margins, optimizing the product catalog and, most importantly, turnaround times,” reads the letter obtained. by Reuters.
The push comes months after Kohl’s ended talks to sell to Franchise Group. The company had been encouraged by activist investors to pursue a sale. Franchise Group offered an offer of $60 per share, before the uncertain economic environment forced it to reduce its potential offer to $53.
Gass came over from Starbucks to take over management from Kevin Mansell in 2018, with plans including expanding Sephora’s presence in Kohl’s stores. Ancora called her a “talented leader” and praised the partnership with Sephora. Boneparth has been a director of the company since 2008 and became its chairman this year.
“During the Boneparth era, the board has created an environment in which Ms. Gass is no longer well placed to lead,” the Ancora letter said.
The activist investor, along with Macellum Advisors, attempted to take control of Kohl’s board in 2021, an attempt the company rejected. In this attempt, Ancora, along with other stakeholders, lobbied for new directors with experience in retail, inventory reduction and the sale of Kohl’s real estate.
Kohl’s received an offer on its property from Oak Street Real Estate Capital earlier in September. The real estate investor offered up to $2 billion for the store property, which Kohl’s would lease for its store locations.
“Now you have an environment where financing has changed so much that it may actually be more attractive to use real estate as a vehicle for monetization,” Boneparth told CNBC in a phone interview ahead of the offering. ‘Oak Street.
Kohl’s and Ancora Holdings did not immediately respond to a request for comment.
Kohl’s shares are down about 43% so far this year.