Kohl’s Corp. is under attack again from activist investors. This time it’s Ancora Holdings Group.
On Thursday, Ancora, which owns about 2.5% of Cole’s stake, sent a letter to its board advocating leadership changes for both its chairman and chief executive officer.
In a letter under Chairman Peter Vornperth and CEO Michelle Gass, Coles “lacked the right leadership during the very difficult times ahead and is forecasting a high-single-digit decline in sales. We’re turning it around, controlling capital and operating expenses and optimizing fulfillment, marketing and merchandising right away.”
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Ancora said it has been in talks with the company’s management over the past 18 months and is making recommendations to improve the company’s poor performance.
“This period provides Cole time to recover from the COVID-19 pandemic, conduct a productive review of strategic alternatives, and develop a viable independent plan that investors can support. China has carefully refrained from public criticism,” the letter said.
“It is with great disappointment that Kohl’s has failed to deliver on each of these key priorities.”
According to Ancora, the board’s decision to reject multiple offers to buy the company for $64 to $65 a share “destroyed billions of dollars in equity value and put the company in a tight spot.” That’s it.
“We estimate that Coles is starting to trade at a steep discount to its liquidation value as alternatives fail to be reviewed and the recent credit downgrade casts a shadow over a shrinking business,” Ancora said. said. “With high inflation, fierce competition and the headwinds of a recession, management now has a responsibility to start operating flawlessly.”
Kohl’s did not immediately reply to Ancora’s letter.
This isn’t the first time Coles has had to manage an activist investor this year.
In the first half of this year, Macellum Capital Management launched a board takeover campaign to encourage shareholders to vote for their candidates. In May, shareholders voted for Coles to retain the board.
Although the acquisition was averted, Kohl’s couldn’t shake the economy as it announced an 8.5% decline in sales in the second quarter as the company planned a $500 million share buyback.
Kohl’s expects annual sales to decline by 5-6%. But that prediction didn’t stop interested companies from reaching out to Coles.
According to recent reports, Oak Street Real Estate Capital has offered Kohl about $2 billion. The company has not commented on the offer.
At noon on Thursday, Kohl’s stock fell 2.47% to $27.21.
Please contact Ricardo Torres at ritorres@gannett.com. Follow him on Twitter. @RicoReporting