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Activist investor calls on Kohl's board to oust chair, CEO
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An activist investor wants Kohl's to remove longtime chair Peter Boneparth and veteran chief executive officer Michelle Gass.
In a letter sent Thursday to the department store chain's board, Ancora Holdings claims Boneparth and Gass failed to reverse Kohl's "sustained underperformance" and unlock shareholder value.
"The combination of the Boneparth-led Board’s ineffective leadership and management’s poor execution, as evidenced by the company’s numbers, compel us to call for a new chairman and chief executive officer at this critical fork in the road," the letter said.
The letter states Kohl's shares have fallen 11.38% since Bonepath's appointment as director in 2008 and 24.71% since Gass was appointed as CEO-elect in September 2017.
Last year, Kohl's agreed to add three new directors to its board after Ancora, Macellum Advisors and Legion Partners Asset Management attempted to seize control. The firm, which owns 2.5% of the retailer's outstanding shares, says it has spent nearly 18 months privately engaging with Kohl's leadership on recommendations to produce a viable standalone plan.
"We thoughtfully withheld public critiques during this period to provide Kohl’s time to bounce back from the COVID-19 pandemic, conduct a productive review of strategic alternatives and produce a viable standalone plan that investors could rally behind," the letter states. "Much to our disappointment, Kohl’s has failed to deliver on each of these critical priorities under Chairman Peter Boneparth (who has been a director for nearly 15 years) and Chief Executive Officer Michelle Gass (who has been a c-level leader for nearly a decade)."
Ancora argues that Kohl’s needs new leadership with "demonstrated experience in cost containment, margin expansion, product catalog optimization and, most importantly, turnarounds."