Kohl’s Corp. sent a letter to shareholders outlining why they should not vote for the five board members proposed by its activist investors group.
In the letter from its board of directors, the retailer pointed out the experience and expertise of the 12 directors, noting that all have extensive senior leadership experience and experience in retail or consumer-facing industries. They also have public board experience.
“In contrast, the Activists’ slate lacks critical relevant experience,” the directors stated in the letter, noting that one of the nominees has presided over four companies that filed for bankruptcy, three have not served on the boards of retail companies of a comparable size to Kohl’s and two have never served on a public company board.
“Finally, four of five of the Activists’ nominees lack meaningful digital experience, an area critically important to Kohl’s future growth, now representing 40% of our business,” the directors wrote.
The directors also said that Kohl’s was building on momentum to drive top line growth in several key areas, including beauty. As previously reported, Sephora will become Kohl’s exclusive beauty partner with least 850 in-store shops at Kohl’s locations by 2020, with 200 opening this year, along with a digital launch in August 2021.
In addition, the chain is working to increase its active business, which grew at a 10% CAGR from 2017 to 2019 and continued to outperform in 2020, representing represents 20% of its sales. Kohl’s plans to increase active to 30% of sales, fueled by new partnerships with such brands as Land’s End and Eddie Bauer and assortment expansion of key national brands.
Kohl’s said it is also reenergizing its women’s business under a new leadership team, exiting more than 10 down-trending brands, and is also continuing to invest in its omnichannel capabilities.
“We have thoroughly evaluated each of the Activists’ areas of focus and found that we are already addressing the vast majority of them through previously announced initiatives,” the letter stated. “Other proposals, such as selling assets through sale-leaseback transactions, reflect a short-term approach and risk destroying significant shareholder value.”