Ancora Holdings Calls for New Kohl’s CEO and Chairperson Following Rejected Acquisition Offers


Activist investor Ancora Holdings Group is seeking the removal of Kohl’s CEO Michelle Gass and Chairman Peter Boneparth. The firm, which holds a 2.5% stake in the retailer, stated that “Kohl’s needs new leadership with demonstrated experience in cost containment, margin expansion, product catalog optimization and, most importantly, turnarounds.”

Ancora cited Kohl’s repeated rejection of acquisition offers, including from Sycamore Partners and Acacia Research in February 2022 and Franchise Group in July 2022, as part of the need for new management. The offers had valued Kohl’s at $65 and $60 per share, respectively, well above the current share price of $27.50. The activist investor expressed concern that Kohl’s will be unable to manage a true turnaround.

“With a failed review of alternatives and recent credit downgrade now casting shadows over what is a shrinking business, we estimate that Kohl’s has begun to trade at a steep discount to its liquidation value,” said Ancora in a letter to Kohl’s. “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’s lacks the right leadership for the exceedingly challenging period ahead — 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.”

While Ancora praised Gass as a “talented leader who deserves credit for establishing an innovative partnership with Sephora USA, Inc. and holding the organization together during the pandemic,” and noted that her tenure aligns with its own focus on installing more female leaders in corporate boardrooms, the firm also stated that total shareholder returns (TSR) have fallen 24.7% since she was appointed as CEO-Elect in May 2018.


“Although Kohl’s has cited the pandemic as a pretext for recent performance issues, this defense does not hold up,” said Ancora. “The fact is that Ms. Gass has been a C-level leader at Kohl’s since 2013 — and TSR is negative over that period as well. Additionally, as Kohl’s has languished coming out of the pandemic, many retail peers have recovered and seen their sales dramatically increase over the past 12 to 18 months.”

Ancora also cited Kohl’s recent C-level turnover, falling share price and declining sales as additional reasons that the company should seek new leadership. Net sales fell 8.5% during the quarter that ended July 30, 2022 while comparable sales dropped 7.7%.

“We urge the Board to announce a thoughtful succession plan and run a robust search process that accounts for interviewing a highly diverse group of qualified candidates,” said Ancora. “Ultimately, Kohl’s needs leadership that can design and implement a precise turnaround strategy to ensure the Company averts peril and starts producing enhanced value for shareholders over the long-term.” Ancora is one of several activist investors that has been pushing for change at Kohl’s. In February 2021, the firm joined with Macellum Advisors GP, Legion Partners Asset Management and 4010 Capital to push a slate of nine nominees for Kohl’s Board of Directors, ultimately reaching an agreement to appoint three

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