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    HomeBusinessKohl’s Faces Renewed Pressure to Sell Itself as Bidders Emerge

    Kohl’s Faces Renewed Pressure to Sell Itself as Bidders Emerge


    The retailer Kohl’s is under increasing pressure on multiple fronts. On Thursday, the activist investment firm Macellum Advisors, which has been fighting for changes at Kohl’s for more than a year, sought to take over the retailer’s board as part of its push to persuade the company to sell itself.

    Kohl’s has recently received takeover approaches but rejected them as too low. Last week, it said it had hired the investment bank PJT Partners and Goldman Sachs to field any further interest. It also put in place a “poison pill” provision that makes it harder for an acquirer to put a bid directly to Kohl’s shareholders. It made an exception for “qualified” offers, which requires the bids to be fully financed, among other conditions.

    In its push for a sale, Macellum said it was convinced “more than ever” that the retailer’s board needed to be refreshed — it has proposed a slate of 10 candidates. Macellum, which owns about 5 percent of Kohl’s shares, struck a settlement with the retailer in April that included the addition of three new directors to its 14-seat board. All members of Kohl’s board, aside from its chief executive, Michelle Gass, are independent. The chairman, Frank Sica, is not standing for re-election to the board.

    Kohl’s called Macellum’s effort to take control of its board “unjustified and counterproductive.”

    Several potential suitors for Kohl’s have recently emerged:

    • Acacia Research, which is backed by the activist investment firm Starboard Value, last month offered $9 billion, which was 37 percent higher than Kohl’s market value at the time.

    • The private equity firm Sycamore Partners has also expressed interest in bidding.

    • Leonard Green & Partners, a private equity firm, has reached out to Kohl’s about a potential bid, first reported by the DealBook newsletter. The firm, which has deep retail expertise, previously tried to lead a management buyout of Nordstrom.

    Like most department stores, Kohl’s has struggled to fend off competition from online retailers and brands themselves, which are increasingly sidestepping department stores altogether. It has worked to carve out a place for itself by focusing in part on athleisure wear, which makes up more than a quarter of its sales.

    Analysts have lauded Kohl’s for creative use of its real estate, like partnerships with Amazon and Sephora, to rethink profitability of its more than 1,000 stores. But they have also warned about the potential impact of supply chain challenges on sales.

    Kohl’s in November reported a 16 percent jump in quarterly revenue. Its shares are up more than 20 percent this year, fueled by the takeover interest.

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