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Kingsbury appointment keeps Kohl's activists at bay

Feb 6, 2023
Photograph of Tom Kingsbury

Photo: Thos Robinson/Getty Images for K.I.D.S./Fashion Delivers

Kohl's should get a reprieve from activist pressure this proxy season after switching Tom Kingsbury's CEO status from interim to permanent.

Why it matters: Hedge fund Macellum Advisors, which ran a proxy contest against Kohl's last year and threatened another one this year, signed a multi-year standstill agreement with the retailer.

  • A source familiar with the situation added that the decision should help the department store chain avoid a proxy fight from any activist, not just Macellum.

What they're saying: Ancora Holdings, which has been one of several hedge funds to call Kohl's strategy into question and was pushing for a new chair, did not respond to a request for comment on whether Kingsbury's appointment satisfied its own demands.

  • Kohl's wrote in an email it would not elaborate beyond the press release on whether the company could face agitation from activists besides Macellum.

Catch up fast: Axios reported in September that Ancora, which was calling for change at the top, planned to push for Kingsbury as permanent CEO.

  • In response at the time, Kohl's board said it fully supported then-CEO Michelle Gass, as well as her leadership team.
  • In November, however, Kohl's announced Gass was leaving the role of her own accord to become president, and eventually CEO, of Levi's.
  • Kingsbury, who already sat on the Kohl's board, was considered a logical choice given his success as CEO of discount retailer Burlington Stores.

What we're watching: In addition to Macellum and Ancora, Legion Partners and 4010 Capital have also pushed for changes at Kohl's in the past.

  • How much time will Kingsbury, who has the confidence of Macellum and Ancora, be given to change the fortunes of the retailer and its investors?
  • And if the M&A environment improves, will the new CEO revive shelved plans to sell the company?

The bottom line: Kohl's board and management have some breathing room to run the business without the distraction of activists.

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