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Activist investor Ancora Holdings is pushing Kohl’s to oust its chief executive and its chairman.
Ancora sent a letter to the board on Thursday seeking the replacement of CEO Michelle Gass and chairman Peter Bonperth. The firm, which owns a 2.5% stake in Kohl’s, wants new leadership so the company can restructure its business.
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“Kohl’s needs new leadership with proven experience in cost control, margin expansion, product catalog optimization and, most importantly, turnaround,” says the letter, which was obtained by CNBC.
The move comes months after Kohl’s stopped talks to sell the franchise to the group. The company has been encouraged by activist investors to pursue a sale. Franchise Group proposed a bid of $60 per share before the uncertain economic environment forced it to lower its potential offer to $53.
Gass arrived from Starbucks as CEO of Kevin Mansell in 2018, with plans including expanding Sephora’s presence in Kohl’s stores. Ancora called him a “talented leader” and praised Sephora’s partnership. Bonperth has been a director of the company since 2008 and became chairman this year.
“During the Bonperth era, the board has created an environment in which Ms. Guss is no longer in an appropriate position to lead,” the Ancora letter said.
Activist investors, along with Masellam Advisors, attempted to seize control of Kohl’s board in 2021. In that effort, Ancora, along with other stakeholders, pushed for new managers with retail experience, inventory reduction and the sale of Kohl’s real estate. Kohl’s efforts pushed back, and the two teams settled on adding three new directors.
Kohl’s received a bid for the property from Oak Street Real Estate Capital in early September. The real estate investor has offered as much as $2 billion for the chain’s property, which Kohl’s will return for its store locations.
“Now you’ve got an environment where financing has changed so much that it might actually be more attractive to use real estate as a monetization vehicle,” Bonperth told CNBC in a phone interview ahead of the Oak Street offering.
Kohl’s and Ancora Holdings did not immediately respond to requests for comment.
Kohl’s shares are down about 43% so far this year.