Kohl’s shareholders rejected a bid by activist investor Macellum Advisors to replace as many as 10 of its 13 directors, supporting the retailer’s current board as the company explores a sale.
Hedge fund Macellum had called for 10 of the board’s 13 members to be replaced, arguing that Kohl’s chief executive Michelle Gass’ efforts to jumpstart growth at the budget department store chain have fallen flat.
The Wisconsin-based retailer has also faced pressure to sell itself and is currently running a sales process that has attracted multiple bidders including shopping-mall giant Simon Property and Canada-based Brookfield Asset Management — which together scooped JCPenney out of bankruptcy in December.
Kohl’s also has attracted interest from Sycamore Partners and Leonard Green & Partners as well as Saks Fifth Avenue’s Canada-based parent company Hudson’s Bay.
Shareholders voted to re-elect all 13 directors, the company announced.
The results deal a blow to Macellum after it had received support from a key proxy advisory firm that often guides investor votes. Institutional Shareholder Services recommended that Kohl’s investors elect two of the 10 board nominees suggested by Macellum.
“I think the vote was a referendum on a sale, and people who voted for the company bought the narrative that any changes of the board in the middle of this process had ran the risk of disrupting the process,” Macellum chief executive Jonathan Duskin told CNBC, adding, “We aren’t going away.”
A year ago Macellum, along with two partners, pushed for changes at Kohl’s but decided to drop that challenge when Kohl’s expanded the size of its board by three directors.
“While we have had differences with Macellum, this Board is committed to serving the interests of all our shareholders,” Kohl’s Chairman Peter Boneparth said in a statement. “The board remains focused on running a robust and intentional review of strategic alternatives while executing our strategy to drive shareholder value.”
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