Macellum Issues Statement Regarding the Kohl’s Board’s Apparent Breach of Fiduciary Duty and Failure to Disclose Material Information Prior to 2022 Annual Meeting
May 20 2022 - 7:00AM
Business Wire
Macellum Advisors GP, LLC (together with its affiliates,
“Macellum” or “we”), a long-term holder of nearly 5% of the
outstanding common shares of Kohl’s Corporation (NYSE: KSS)
(“Kohl’s” or the “Company”), today issued the following statement
regarding the Company and its Board of Directors (the “Board”)
attributable to its Managing Partner, Jonathan Duskin:
“This quarter’s extremely disappointing
results do not change the fact that Kohl’s is a uniquely positioned
retailer with tremendous long-term opportunities to increase sales,
expand margins and produce superior earnings. Based on
our extensive analysis of Kohl’s and the retail sector, we can say
with great conviction that yesterday’s results are simply a
consequence of a weak Board and management configuration leading to
a flawed strategic plan and an inability to execute. Under the
right oversight and leadership that has sufficient expertise and a
viable strategy, we firmly believe Kohl’s will consistently deliver
superior operating and financial results.
It was alarming to learn yesterday that
the current Board appears to have withheld material information
from shareholders about the state of Kohl’s in the lead-up to this
year’s pivotal annual meeting. We believe all of the
Company’s shareholders should feel betrayed and outraged by the
fact that the quarter’s massive earnings miss, reduced guidance and
the imminent departures of two senior executives, who presumably
supported the development of Kohl’s' three-year strategy released
in March 2022, were not disclosed prior to last week’s annual
meeting. If any of the current directors were aware of this material information prior
to the annual meeting, their involvement in any decision to
withhold the news prior to a monumental shareholder vote suggests
to us a clear breach of fiduciary duty. If any of the current
directors were kept in the dark and not
aware of this information prior to the annual meeting,
we urge this faction of the Board to retain independent counsel and
begin its own investigation to understand how select directors and
shareholders were so grossly misled and what recourse they have.
Either way, Kohl’s should immediately appoint three of our nominees
– including a shareholder representative from Macellum – to the
Board to replace three long-serving incumbents. Keep in mind that
Institutional Shareholder Services, Inc., a leading independent
proxy advisory firm, recommended earlier this month that
shareholders vote to elect multiple Macellum nominees, including
former Macy's, Inc. Chief Merchandising Officer Jeff Kantor and
former L Brands, Inc. Chief Financial Officer Pamela Edwards.
At this point, we believe the current
Board has forfeited its right to continue to oversee Kohl’s and
review offers versus the Company’s internal plan – and it should
immediately commit to accepting the highest financed acquisition
offer received at the conclusion of the sale
process.
We are actively exploring claims
against the Board and will take legal action, if necessary, to
protect our interests as a major long-term shareholder and the
interests of all our fellow shareholders.”
About Macellum
Macellum Capital Management is an activist investment firm, with
deep expertise in the retail and consumer sectors, founded in 2009
by Jonathan Duskin. Macellum invests in undervalued companies that
it believes can appreciate significantly in value as a result of a
change in corporate strategy or improvements in operations, capital
allocation or corporate governance. Macellum’s investment team,
advisors and network of industry experts draw upon their extensive
strategic, operating and boardroom experience to assist companies
in designing and implementing initiatives to improve long-term
shareholder value. Macellum prefers to constructively engage with
management to improve its governance and performance for the
benefit of all stockholders. However, when management is
entrenched, Macellum has run successful proxy contests to
effectuate meaningful change. Macellum has run successful election
contests to effectuate meaningful change at many companies,
including at The Children’s Place Inc., Citi Trends, Inc., Bed Bath
and Beyond and Big Lots, Inc. Learn more at
www.macellumcapitalmanagement.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20220520005081/en/
Longacre Square Partners Greg Marose / Casie Connolly,
646-386-0091 macellum@longacresquare.com
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