Hedge fund Ancora seeks to oust Kohl’s CEO, chairman

Hedge fund Ancora seeks to oust Kohl’s CEO, chairman

Written by Sophia Herbst Bayliss

(Reuters) – Ankora Holdings, one of the hedge funds that spearheaded last year’s board reshuffle at Kohl’s Corp (NYSE:), is now pushing for the removal of the US retailer’s CEO and chairman, according to a letter sent. company on Thursday.

The move marks the beginning of a new round of shareholder turmoil for Kohl’s after the company explored a sale and decided in July to remain independent, sending its shares down and frustrating investors who had pushed for a deal.

Ancora, which owns a 2.5% stake in Kohl’s, has asked to replace CEO Michael Gass and Chairman Peter Bonbarth with business leaders who have operational experience and expertise in corporate transformation.

The letter, signed by Ancora CEO Frederic DeSanto and President James Chadwick, did not say who should be the successors.

“Kohl needs new leadership with proven experience in cost containment, margin expansion, product catalog optimization, and most importantly, transformations,” the letter read.

Kohl’s representative did not respond to a request for comment.

The Wisconsin-based Menomonee Falls, which operates more than 1,100 stores in the United States, has seen its inventory decline 48% in the last 52 weeks, report a 63% decline in net income and an 8% decrease in store sales in the most. The last quarter ended July 30.

Reuters previously reported that Cole has rejected multiple offers to sell herself this year, telling bidders she believes her shares are worth more than $70 a share. The stock closed Wednesday at $27.90, giving it a market value of $3.3 billion.

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Ancora and two other investors reached a settlement with Kohl’s in 2021 that resulted in three new directors joining the board. One of the directors was Thomas Kingsbury, who became CEO of Burlington Stores (NYSE:) in 2008 and led the retailer to a public offering in 2014.

Since then, Ancora has been frustrated by the company’s failed attempt to sell itself.

Ankura described Gas in her letter as a “talented leader,” praising the partnership she developed with Sephora and the organization’s “cohesion during the pandemic.” But the hedge fund blamed it on a “worrying level of third-cluster turnover” and “suboptimal staffing” selection.

Ancora also wrote that nearly $60 million in total compensation paid to Gass between 2017 and 2021 was pretty rich given the company’s poor revenue.

Ankura writes that Bonbarth, who has served as Kohl’s director since 2008 and became chairman this year, has helped create an environment in which “Jas is no longer in a good position to lead.”

Reuters reported earlier this month that private equity firm Oak Street Real Estate Capital Ltd. has made an offer to buy up to $2 billion in real estate from Coles and lease back its stores. Cole said in July after negotiations on the deal failed that it was looking at ways to cash in on its properties.

Cole’s shares were down about 1% Thursday.

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