The Kohl’s logo is displayed on the outside of Kohl’s store on January 24, 2022 in San Rafael, California.
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Kohl’s shareholders voted to re-elect the current 13-member board of directors as the retailer faced increasing pressure from activists for major repairs, Kohl’s reported on Wednesday.
Kohl’s annual shareholders’ meeting came at a time when activist company Macellum Advisors was pushing for Kohl’s to update its list of directors, arguing that in recent years the company has failed to do so compared to other retailers.
Macellum claims that Kohl’s CEO Michelle Gass’s efforts, such as merging with Sephora beauty salon or partnering with Amazon on a return program, have been insufficient.
In February, Macellum nominated 10 directors, including its CEO Jonathan Daskin. The activist also demanded that Kohl’s sell himself and unload part of his property and hand it back to get extra capital.
Kohl’s was resilient to such sale-and-lease deals, but the retailer turned to Goldman Sachs bankers to evaluate the rates. In March, Kohl’s confirmed that it had received several preliminary buyout offers following the rejection of an application from Acacia Research, supported by Starboard, at $ 64 per share, which was deemed too low.
Shares of Kohl closed at $ 49.39 on Tuesday compared to a 52-week high of $ 64.80. Shares fell more than 1% at the start of trading on Wednesday.
In the run-up to Wednesday’s vote, key practice advisory firms shared their recommendations. Institutional Shareholder Services, or ISS, supported Macellum, while Glass Lewis said shareholders were best supported by Kohl’s current board.
This is also not the first time Maccellum has put pressure on Kohl. In April 2021, they struck a deal to add two directors from a list sought by a group of activists that included McEllum. Kohl also appointed one independent director with the support of activists.
Kohl’s council “continues to focus on conducting a credible and deliberate review of strategic alternatives,” said Chairman Peter Bonepart.
“While we have had disagreements with Macellum, this board is committed to serving the interests of all our shareholders,” he said.
And although Maccellum did not win the vote, the activist’s campaign says it will not remain silent.
“I think the vote was a referendum on the sale, and the people who voted for the campaign bought the story that any change in the board in the middle of the process risked disrupting the process,” Duskin told CNBC.
“Voting for the campaign was voting for selling the business,” he said. “We’re not leaving.”
– CNBC’s Courtney Reagan contributed to this report.