Kohl’s has named three new directors to its board as part of an agreement with a group of activist investors that have been pushing since December 2020 for a shakeup of the company’s leadership in an effort to alter the retailer’s trajectory.
The group of investors — which include Macellum Advisors GP, Ancora Holdings, Legion Partners Asset Management and 4010 Capital — collectively own 9.3% of Kohl’s stock.
In February, the investor group nominated a slate of new candidates for the board citing “poor retail execution and strategy leading to stagnant sales and declining operating margins.” Two of the investor group’s nominees will now join the Kohl’s board — former Denny’s CMO Margaret Jenkins and former Burlington Stores CEO Thomas Kingsbury — along with a third member selected by Kohl’s, former Lululemon CEO Christine Day.
The strong retail credentials of the three additions meets a key demand of the investor group, which had pointed to the lack of retail experience among the current board as central to the company’s woes.
“We are pleased to further strengthen our board with the addition of Christine, Margaret and Tom as part of our continued refreshment process” said Kohl’s Chairman Frank Sica in a statement. “Today’s agreement reflects our board’s ongoing dialogue with our shareholders and our commitment to maximizing long-term value for all stakeholders.”
“These new directors are all proven leaders in retail who will add valuable expertise to the board,” said the investor group in a statement. “We are pleased to have been able to reach this constructive resolution with the company, and we are confident these changes will help further our shared goal of creating long-term value for shareholders.”
Other elements of the agreement between Kohl’s and the investor group include:
- The board’s existing ad hoc finance committee will become a standing Finance Committee of the board the purpose of which will include assisting the board on its oversight of capital allocation decisions made by the company. Kingsbury will join this committee.
- The board agreed to expand its existing share repurchase authorization to $2 billion, which can be used to repurchase shares at the company’s discretion.
“I look forward to working with our newly expanded board to further advance our transformative strategy and deliver results for shareholders,” said Kohl’s CEO Michelle Gass in a statement. “Amidst ongoing industry disruption and evolving consumer trends, we are uniquely positioned to build on our momentum and accelerate growth and profitability.”
More about the new directors:
- Christine Day is Co-founder and Executive Chairman of The House of LR&C, a new concept in retail with a focus on fashion and sustainability. She also currently serves on the board of directors of Performance Kitchen. From 2008 to 2013, Day served as the CEO of lululemon, and prior to that she spent more than 20 years at Starbucks in a variety of leadership positions.
- Margaret Jenkins has served as a director for clothing retailer Citi Trends as well as for international apparel manufacturer and retailer PVH Corp. She also has served as CMO of Denny’s and El Pollo Loco, and held several management positions at Taco Bell and PepsiCo.
- Thomas Kingsbury currently serves as an independent director at Big Lots, BJ’S Wholesale Club and Tractor Supply Co. Most recently, he served as the President and CEO of Burlington Stores from 2008 until his retirement in September 2019.