Activist investor calls on Kohl’s board to oust chair, CEO

An activist investor wants Kohl’s to remove longtime chairman Peter Boneparth and veteran CEO Michelle Gass.

In a letter sent to the department store chain’s board on Thursday, Ancora Holdings claims Boneparth and Gass have failed to reverse Kohl’s “persistent underperformance” and unlock shareholder value.

“The combination of the ineffective leadership of the Boneparth-led Board and poor management execution, as reflected in the company’s numbers, compels us to request a new chairman and chief executive officer on this critical split,” wrote Ancora.

ticker Safety Last Change Change %
KSS KOHL’S CORP. 26.93 -0.97 -3.48%

The letter states that Kohl’s shares have fallen 11.38% since Bonepath’s appointment as director in 2008 and by 24.71% since Gass was appointed CEO in September 2017.

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The company, which owns 2.5% of the retailer’s outstanding shares, says it has spent nearly 18 months privately leading Kohl on recommendations to help improve his business.

“We have carefully withheld public criticism during this time to give Kohl time to bounce back from the COVID-19 pandemic, conduct a productive assessment of strategic alternatives, and produce a viable standalone plan for investors to get behind. can join,” the letter reads. “To our disappointment, Kohl’s under Chairman Peter Boneparth (who has been a director for nearly 15 years) and Chief Executive Officer Michelle Gass (who has been a c-level leader for nearly a year) has failed to meet each of these critical priorities. .”

A car drives past the entrance to a Kohl’s department store in Orlando, Florida (AP Photo/John Raoux, File)

Ancora states that Kohl’s new leadership will require “demonstrated experience in cost control, margin expansion, product catalog optimization and, most importantly, turnarounds.”

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Last year, Kohl’s agreed to add three new directors to its board of directors after Ancora, Macellum Advisors and Legion Partners Asset Management attempted to take control. Sources familiar with the case told FOX Business that Ancora believes Thomas Kingsbury, the former CEO of Burlington Stores, who joined Kohl’s board of directors in 2021 as part of the settlement, could work as a possible successor to Gass. or Bonepart.

A representative from Kingsbury did not immediately respond to FOX Business’s request for comment.


According to Ancora, Gass is a “talented leader” who “deserves credit for establishing an innovative partnership with Sephora USA, Inc. and keeping the organization together during the pandemic.”

However, they blame Gass for a “disturbing level of c-suite attrition” and said she selected “sub-optimal staff”. They also said her nearly $60 million in compensation between fiscal years 2017 and 2021 was too much given the company’s poor returns and alarming rate of shrinkage.

In addition, the letter claims that the Boneparth-led board has helped create an environment where Gass is “no longer well positioned to lead.”

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A Kohl’s spokesperson told FOX Business that the board “unanimously supports” Gass and her leadership team.

“We remain committed to maximizing value and acting in the best interests of all our shareholders by staying focused on running the business, and the board of directors continues to actively work with management to navigate the current retail environment,” the company added.


The letter comes after Kohl’s rejected several bids from potential buyers because they were too low. Most recently, Kohl ended sales talks with Franchise Group in July. Vitamin Shoppe’s owner initially offered $60 a share, but later lowered the offer to $53 a share due to an uncertain economic environment.

Earlier this month, people familiar with the case told Reuters that private equity firm Oak Street Real Estate Capital made an offer to acquire as much as $2 billion worth of Kohl’s real estate and let the company lease its stores.

Standard & Poor’s downgraded Kohl’s on September 16, indicating that competitive pressures in the developing and highly competitive department store segment remain significant.

“With a failed assessment of alternatives and a recent credit cut now casting shadows on what is a shrinking business, we estimate Kohl’s has started trading at a hefty discount to its liquidation value,” Ancora’s letter adds. “It is now up to management to start executing flawlessly against a backdrop of high inflation, fierce competition and recessive headwinds.”

At the time of publishing, Kohl’s stock is down about 45% so far.

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