Kohl's on Wednesday announced a settlement with a group of investors, Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital, which together own a 9.3% stake and had been agitating for board changes.
Per the agreement, two independent directors nominated by the group, Margaret Jenkins and Thomas Kingsbury, will join at the close of Kohl's upcoming annual shareholder meeting. Former Lululemon CEO Christine Day, an independent director "identified by Kohl's, and agreed to by the Investor Group," will also join then.
Kohl's also noted that Steve Burd will retire from the board at the end of August and Chairman Frank Sica will retire in a year. The ad hoc finance committee will become a standing committee that oversees capital allocation, which Kingsbury will join. And the board expanded its share repurchase authorization to $2 billion.
Kohl's and these activists have waged a battle of words in recent weeks that threatened to disrupt the company's annual meeting.
In addition to pushing to scramble the board, the investor group has been highly critical of the retailer's merchandising, inventory management, customer engagement and expense rationalization, and previously pushed it "to unlock $7-8 billion of real estate value trapped on the Company's balance sheet through sale leaseback transactions."
A truce now prevails, and a website once dedicated to slamming Kohl's has been taken down. Sica described the new agreement as a reflection of the board's "ongoing dialogue with our shareholders." Kohl's CEO Michelle Gass said in a statement that she looks "forward to working with our newly expanded Board."
As for the investor group, in their statement, they called the new directors "all proven leaders in retail who will add valuable expertise" and said, "We are excited for the future at Kohl's."
That's not necessarily the end of change at Kohl's, however, considering the board changes. The same investment firms were behind a board shakeup at Bed Bath & Beyond two years ago, following a similar period of heated back-and-forth rhetoric. While at the time that retailer's chief executive stayed put, that changed shortly after. For a little over a year now, since taking the CEO job, former Target chief merchant Mark Tritton has held the reins of a turnaround that appears to be gaining traction.