{"id":687961,"date":"2022-09-22T08:04:16","date_gmt":"2022-09-22T12:04:16","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/ancora-sends-letter-to-the-board-of-directors-of-kohls-regarding-the-need-for-a-new-chairman-and-chief-executive-officer-with-turnaround-experience\/"},"modified":"2022-09-22T08:04:16","modified_gmt":"2022-09-22T12:04:16","slug":"ancora-sends-letter-to-the-board-of-directors-of-kohls-regarding-the-need-for-a-new-chairman-and-chief-executive-officer-with-turnaround-experience","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/ancora-sends-letter-to-the-board-of-directors-of-kohls-regarding-the-need-for-a-new-chairman-and-chief-executive-officer-with-turnaround-experience\/","title":{"rendered":"Ancora Sends Letter to the Board of Directors of Kohl\u2019s Regarding the Need for a New Chairman and Chief Executive Officer with Turnaround Experience"},"content":{"rendered":"

<\/p>\n

\nAncora Sends Letter to the Board of Directors of Kohl\u2019s Regarding the Need for a New Chairman and Chief Executive Officer with Turnaround Experience\n<\/p>\n

Believes the Company\u2019s Botched Strategic Review, Credit Downgrade, Dramatic Decline in Sales, Elevated Costs and Poorly Received Standalone Plan Have Placed Kohl\u2019s on a Dangerous Trajectory \u2013 With Share Price Down 45% Over the Past Year<\/i><\/b><\/p>\n

Contends the Board\u2019s Actions Have Created an Environment in Which CEO Michelle Gass is No Longer Ideally Suited to Lead Kohl\u2019s to Long-Term Value Creation<\/i><\/b><\/p>\n

Urges the Board to Appoint a New Chairman and Announce a CEO Succession Plan That Accounts for Interviewing a Diverse Group of Qualified Candidates with Experience Turning Around Retailers<\/i><\/b><\/p>\n

CLEVELAND–(BUSINESS WIRE<\/a>)–
\nAncora Holdings Group, LLC today announced that it has sent the below letter to the Board of Directors of Kohl\u2019s Corporation (NYSE: KSS).\n<\/p>\n

\n***\n<\/p>\n

\nSeptember 22, 2022\n<\/p>\n

\nKohl\u2019s Corporation
\n
N56 W17000 Ridgewood Drive
\n
Menomonee Falls, WI 53051
\n
Attn: The Board of Directors\n<\/p>\n

\nMembers of the Board of Directors,\n<\/p>\n

\nAncora Holdings Group, LLC (together with its affiliates, \u201cAncora\u201d or \u201cwe\u201d) is a long-term shareholder of Kohl\u2019s Corporation (\u201cKohl\u2019s\u201d or the \u201cCompany\u201d), with a beneficial ownership position of approximately 2.5% of the Company\u2019s outstanding shares. Since collaborating with you on an incremental refresh of the Board of Directors (the \u201cBoard\u201d) in early 2021, we have spent nearly 18 months privately engaging with leadership to share recommendations for reversing the Company\u2019s sustained underperformance and unlocking value for long-suffering shareholders. We thoughtfully withheld public critiques during this period to provide Kohl\u2019s time to bounce back from the COVID-19 pandemic, conduct a productive review of strategic alternatives and produce a viable standalone plan that investors could rally behind. Much to our disappointment, Kohl\u2019s has failed to deliver on each of these critical priorities 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 decade).\n<\/p>\n

If the Boneparth-led Board remains firmly committed to its preferred standalone path, we contend that Kohl\u2019s needs new leadership with demonstrated experience in cost containment, margin expansion, product catalog optimization and, most importantly, turnarounds<\/span>.<\/b> We appreciate that Chairman Boneparth has allowed us to share private feedback with him in recent months. We also want to underscore that Michelle Gass, the Company\u2019s current Chief Executive Officer, is a talented leader who deserves credit for establishing an innovative partnership with Sephora USA, Inc. and holding the organization together during the pandemic. We have been proud to invest in a business that maintains strong gender diversity in the c-suite, as it aligns with our recognized focus on installing female leaders in more corporate boardrooms.1<\/sup> However, our view regarding the need for new leadership at Kohl\u2019s is simply based on the facts.\n<\/p>\n

During the Boneparth era, the Board has created an environment in which Ms. Gass is no longer well-positioned to lead<\/span>.<\/b> The Board\u2019s decisions to reject multiple indications of interest in the $64-$65 per share range in the winter and then proceed with an opaque strategic review throughout the spring \u2013 as financing markets gradually deteriorated \u2013 have destroyed billions of dollars in equity value and painted the Company into a corner. With a failed review of alternatives and recent credit downgrade now casting shadows over what is a shrinking business, we estimate that Kohl\u2019s has begun to trade at a steep discount to its liquidation value. The onus is now on management to begin executing flawlessly against a backdrop that includes high inflation, intense competition and recessionary headwinds. Unfortunately, the facts indicate Kohl\u2019s lacks the right leadership for the exceedingly challenging period ahead \u2013 one that will require the Company to reverse high-single-digit sales declines, contain capital expenditures and operating expenses, and immediately optimize fulfillment, marketing and merchandising.\n<\/p>\n

\nIt gives us no satisfaction to note that Kohl\u2019s has produced negative total shareholder returns (\u201cTSR\u201d) over every relevant horizon:2<\/sup><\/p>\n\n\n\n
\n

1-Year<\/i><\/b><\/p>\n<\/td>\n

\n

3-Year<\/i><\/b><\/p>\n<\/td>\n

\n

5-Year<\/i><\/b><\/p>\n<\/td>\n

\n

Since 2021
\n
Settlement<\/i><\/b><\/p>\n<\/td>\n

\n

Since Gass
\n
Appointment as
\n
CEO-Elect<\/i><\/b><\/p>\n<\/td>\n

\n

Since
\n
Boneparth
\n
Appointment<\/i><\/b><\/p>\n<\/td>\n<\/tr>\n

\n

-43.78%<\/i><\/p>\n<\/td>\n

\n

-39.61%<\/i><\/p>\n<\/td>\n

\n

-22.81%<\/i><\/p>\n<\/td>\n

\n

-49.33%<\/i><\/p>\n<\/td>\n

\n

-24.71%<\/i><\/p>\n<\/td>\n

\n

-11.38%<\/i><\/p>\n<\/td>\n<\/tr>\n<\/table>\n

\nAlthough Kohl\u2019s has cited the pandemic as a pretext for recent performance issues, this defense does not hold up. The fact is that Ms. Gass has been a c-level leader at Kohl\u2019s since 2013 \u2013 and TSR is negative over that period as well. Additionally, as Kohl\u2019s has languished coming out of the pandemic, many retail peers have recovered and seen their sales dramatically increase over the past 12-18 months.\n<\/p>\n

\nAs the Board hopefully takes time to assess our recommendation, we urge it to consider some other germane facts:\n<\/p>\n