Kohl’s Confirms Receipt of Takeover Offers Amid Turnaround Efforts
Interest in Kohl’s is bubbling up.
On Saturday, reports claimed the retailer received an unsolicited $9 billion offer to go private from a consortium backed by an activist investor. A group led by Acacia Research Corp., which activist hedge fund Starboard Value LP controls, offered to buy the department-store chain for $64 a share in cash Friday, The Wall Street Journal reported.
On Sunday, Bloomberg reported Sycamore Partners had reached out to Kohl’s about a deal, according to people familiar with the matter, but it was unclear how much Sycamore is willing to pay for the company. Sycamore has a history of buying up retailers. Premium Apparel LLC, an affiliate of Sycamore Partners, bought Ann Taylor, Loft, Lou & Grey and Lane Bryant brands from Ascena Retail Group for $540 million.
On the heels of these reports, Kohl’s made a statement to confirm that it has received letters expressing interest in acquiring the company.
“The Kohl’s board of directors will determine the course of action that it believes is in the best interests of the company and its shareholders,” it said in a press release. “Shareholders are not required to take any action at this time.”
Kohl’s noted it does not intend to further comment publicly on these matters unless it determines it is in the best interests of shareholders to do so.
Kohl’s came under fire from activist investor Macellum Advisors, when on January 18, the company, which holds nearly 5% of the outstanding common shares of Kohl’s, issued an open letter to its fellow shareholders.
“Macellum ran a campaign last year highlighting what we felt was the board’s material mismanagement of the company and inability to create value,” the letter said. “Now, almost one year later, the company’s shares have significantly underperformed its retail peers and it is clear to us that our criticism was accurate.”
On Sunday, WSJ reported Engine Capital sent another letter urging Kohl’s to run sale process following Starboard Value bid.
Kohl’s has made some changes in recent years. It forged partnerships with Sephora and Amazon, added curbside pickup, and launched a new loyalty program.
Kohl’s completed its nationwide rollout of its Amazon returns program in 2019, where shoppers can return Amazon orders in stores and Kohl’s will pack, label and ship the return for free. Last year, Kohl’s opened the first “Sephora at Kohl’s” experience with plans to open at least 850 in Kohl’s stores by 2023.
“As we've said from the beginning, this is a game-changing partnership for us,” Kohl’s CEO Michelle Gass said on the retailer’s earnings call last November. “In short, Sephora at Kohl's is working.”
Gass noted that more than 25% of Sephora at Kohl's shoppers are new to Kohl's and they are younger and more diverse. She also noted roughly half of customers buying Sephora are attaching at least one other category in their purchase across all lines of business.
“Our efforts to reposition Kohl's are working,” Gass said to open the call. “All of the pieces of our strategy are coming together, and we remain incredibly confident in our future,” she later noted.