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Ancora sent a letter to the board on Thursday asking for CEO Michelle Gass and chairman Peter Boneparth to be replaced. The firm, which has a 2.5% stake in Kohl’s, wants new leadership to help the company revamp its business.
“Kohl’s needs new leadership with proven experience in cost containment, margin expansion, product catalog optimization and, most importantly, turnarounds,” the letter, obtained by Reuters, said.
The pressure comes a few months later Kohl’s has ended negotiations to sell Franchise Group. The company was encouraged by activist investors to proceed with the sale. Franchise Group proposed an offer of $60 per sharebefore an uncertain economic environment forced it to lower its potential offer to $53.
Gass came from Starbucks to take over for CEO Kevin Mansell in 2018, with plans including expanding Sephora’s presence in Kohl’s stores. Ancora called her a “talented leader” and praised the Sephora partnership. Boneparth has been a director of the company since 2008 and became chairman of the board this year.
“During the Boneparth era, the board created an environment in which Ms. Gass is no longer in a good position to lead,” the Ancora letter said.
An activist investor along with Macellum Advisors, attempted to take control of Kohl’s board in 2021, an effort the company rejected. In that effort, Ancora, along with other stakeholders, pushed for new directors with experience in retail, destocking and the sale of Kohl’s properties.
Kohl’s received an offer for its property from Oak Street Real Estate Capital in early September. A real estate investor offered up to $2 billion for the store’s assets, which Kohl’s would lease back for its store locations.
“You now have an environment where financing has changed so much that it may actually be more attractive to use real estate as a monetization vehicle,” Boneparth told CNBC in a phone interview ahead of the Oak Street offering.
Kohl’s and Ancora Holdings did not immediately respond to a request for comment.
Kohl’s shares are down 43% so far this year.