Dive Brief:
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Kohl’s CEO Ashley Buchanan is out as CEO after just a few months after the department store found he was involved in “vendor transactions that involved undisclosed conflicts of interest.” A press release provided no details on specific suppliers or deals.
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Board Chair Michael Bender is interim CEO, effective immediately, while the company finds Buchanan’s replacement. Buchanan, who previously was CEO of Michaels, is no longer a member of the board, and Kohl’s withdrew his nomination to continue as director.
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Buchanan was terminated for cause following an investigation by outside counsel and was found to be acting alone, the company said. He had been tapped to replace Tom Kingsbury as CEO in November and took the post in January.
Dive Insight:
Kohl’s is making a drastic move very early in the tenure of a chief executive who was supposed to oversee a turnaround.
“Firing a CEO just months after his having been hired is about as extreme a measure as you can imagine,” Mark Cohen, a retail veteran who previously ran retail studies at Columbia Business School, said by email.
Buchanan’s favoritism at Kohl’s involved a company founder with whom he has a personal relationship, and a deal with “highly unusual terms favorable to the vendor,” including a multimillion-dollar consulting agreement, according to financial filings. Kohl’s is yanking back all equity awards, and Buchanan will have to reimburse the company for much of his $2.5 million signing bonus.
The vendor was a former Bed Bath & Beyond executive; the two met when they both were at Walmart and became romantically involved, the Wall Street Journal reported Thursday. Kohl’s did not name the vendor.
Whether such alleged behavior occurred at Michaels, where Buchanan was recently CEO, or Walmart U.S., where he served as chief merchant, is a reasonable question, Cohen said.
Kohl’s declined to comment beyond its press release and filings. Michaels and Walmart didn’t immediately return Retail Dive’s request for comment.
Kohl’s underscored that Buchanan’s ouster is unrelated to the company’s performance, financial reporting or operational results. Rather, he is out because he didn’t disclose the relationship as required by the company's code of ethics; the board found that his conduct amounted to a cause for termination per their executive compensation agreement.
His unexpected departure is coming at a rough time for Kohl’s. GlobalData Managing Director Neil Saunders called it “a blow upon a bruise for the beleaguered department store chain.”
“While the sacking is not related to performance, it gives the impression that Kohl’s is in [a] perpetual state of chaos and it raises some questions about the due diligence over his appointment,” he said in emailed comments.
The company started off 2025 with layoffs and store closures, and in March reported that Q4 sales fell more than 9% and net income plunged more than 74%. Comparable sales in that quarter fell almost 7%, and the department store on Thursday said it expects Q1 comps to fall as much as 4.3%.
Last month, Fitch Ratings analysts, citing “ongoing operational challenges,” downgraded the retailer and listed its outlook as negative. The analysts noted that the company does have “a reasonable asset base and ability to invest $400 million in capex for topline initiatives.”
“The company recently replaced its CEO and is adjusting its operating strategy, but its ability to stabilize market share, particularly in apparel, is unknown,” Fitch said.
Not even four months in, the search is on for another.
“Kohl’s now needs to find someone with the requisite skills to enact a quick turnaround and get the company back onto the front foot,” Saunders said. “Given the deep-seated problems at the chain, this might be a tall order.”
