Limited activist group modifies Kohl's board nominees, forfeiting power over corporation control
In recent months, there has been a growing tension between Kohl's Corporation and an activist investor group. The dispute, while not fully detailed in recent search results, can be inferred from various financial and corporate developments.
On Thursday, the activist group published a press release, expressing dissatisfaction with Kohl's language and recommending potential sale leaseback transactions to unlock $7-8 billion of real estate value trapped on Kohl's balance sheet. The group also holds a 9.5% stake in Kohl's and is recommending changes in merchandising, inventory management, customer engagement, and expense rationalization.
However, Kohl's has been unmoved by these demands. The corporation publicly pushed back against the activist group's proposals on March 9, 2021. The activist investors take issue with $600 million in unsecured debt due in 2025, at 9.5% interest, that Kohl's took on in April. They question the necessity of Kohl's borrowing cash during the pandemic, calling the move "very troubling."
The activist investors also criticize the borrowings as "poorly negotiated," including the 9.5% interest rate and a prohibitively expensive make-whole call premium. They claim that Kohl's didn't need the capital due to significant additional sources of liquidity at the time.
The slate proposed by the activist group is perceived as lacking "critical relevant experience." One nominee presided over four companies that filed for bankruptcy. Kohl's, in response, defended its board as adequately refreshed and more experienced in retail than the activists' recommendations.
The activist investors filed a revised proxy statement with the Securities and Exchange Commission after talks with Kohl's representatives broke down. They criticized Kohl's for performing just slightly better than the worst companies in retail and called for a refreshed Board to develop a robust road map to compete for market share.
Kohl's has faced financial challenges, with net sales down 4.1% and reporting a loss of $15 million in Q1 2025. The corporation held its annual shareholder meeting in May 2025 during which it announced a proposed private transaction, though specific proposals or activist demands are not detailed. The firing of Kohl's CEO Ashley Buchanan in May 2025 for policy violations suggests internal leadership instability, which could be a point of contention with activist investors focused on company governance.
Broader trends in proxy seasons reported show activist movements generally have faced resistance or limited investor support in 2025, indicating activist proposals may be challenging to pass unless they strongly resonate with shareholders. More specific details would require direct statements from Kohl's, activist investors, or regulatory filings such as proxy statements or 13D/G filings.
In February 2021, Kohl's named a new independent director, Robbin Mitchell. The corporation detailed meetings between its CEO and other board members and representatives of the activist group in March 9 filings with the SEC. The latest developments in this ongoing dispute are expected to unfold in the coming months.
- The activist investors question the necessity of Kohl's borrowing cash during the pandemic, calling it "very troubling."
- The slate proposed by the activist group is perceived as lacking "critical relevant experience."
- Broader trends in proxy seasons indicate activist proposals may be challenging to pass unless they strongly resonate with shareholders.
- In recent months, there has been an update on trade tensions between Kohl's Corporation and an activist investor group.
- The activist investors filed a revised editorial, criticizing Kohl's for performing just slightly better than the worst companies in retail and calling for a refreshed Board to develop a robust road map to compete for market share.
