The boardroom battle between struggling Kohl’s and its new activist investors is now starting to morph into a war of words, too.
“We believe Kohl’s fourth quarter earnings report and full year 2021 guidance substantiate the immediate need for change on the Board. The Board seems to be content performing just slightly better than the worst companies in retail. ‘Best of the worst’ is not a viable strategy, nor does it satisfy shareholders like us seeking long-term superior performance,” said the activist group of Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital in a new letter Friday.
Together, the group owns about 9.5% of the outstanding shares of Kohl’s.
The letter continued, “Further, we do not believe the company’s recent results are indicative of a strategy that is succeeding. The Investor Group believes that the company’s weak earnings and guidance are demonstrative of a Board comprised of directors lacking relevant retail expertise who are not in a position to provide the necessary oversight to help Kohl’s get back on track. In our view, a substantially refreshed Board with relevant retail expertise can help devise a strategy to take market share back from competitors and not just settle for being better than troubled mall-based department stores.”
Shares of Kohl’s (KSS) fell 2% Friday on the news.
Kohl’s wasted no time firing back.
“As we recently disclosed, our business is building momentum and we have a clear strategy to accelerate revenues and profitability. Our recent operating results outperform across key metrics and demonstrate that we are on the right path. The activist investor group’s comparisons of 2019 results to expectations for 2021 are nonsensical given a continuing global pandemic,” Kohl’s spokeswoman Julia Fennelly said in an emailed statement to Yahoo Finance. “The activist’s comments and track record reveal that they are focused on short-term payout at the expense of sustainable success. The Kohl’s board of directors and management have successfully positioned our company for a multi-year improvement at the top and bottom line. We reject the activists’ short-termism and their attempt to disrupt our momentum at this critical time. We remain open and interested in new ideas that can help us increase value for our company and our shareholders.”