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Here We Go Again? Kohl’s Facing New Board Battle

A second hedge fund just put a target on Kohl’s back—again.

On the heels of Engine Capital telling Kohl’s to take a page from Saks‘ book and cleave its store and digital business in two, activist investor Macellum Advisors on Thursday renewed calls for a board refresh at the department store chain.

If Macellum‘s name is familiar, that’s because the investor worked with Ancora Holdings, Legion Partners Asset Management and 2010 Capital in February to agitate for upheaval at the mid-market chain. Led by Marcellum and its CEO Jonathan Duskin, the investor quartet wanted Kohl’s to consider a sale-leaseback program for its valuable real estate assets, accelerate inventory turns, and establish a good-better-best assortment to re-position women’s apparel as a store traffic driver.

The group had plans for Kohl’s board of directors, too, and submitted nine nominees to be considered for the 2021 board slate, including former investment banker Marjorie Bowen, retail veteran and former senior Coach executive David Duplantis, and Duskin. But Kohl’s quickly rejected the “attempt to seize control of our board and disrupt our momentum,” it said in February, pointing to its “strong growth strategy” and the six new independent directors who had joined the board since 2016.

By April, however, Kohl’s agreed to add two of the group’s nominees—former Burlington Stores CEO Thomas Kingsbury and restaurant industry expert Margaret Jenkins—to a board slate including former Lululemon CEO Christine Day, its own pick. The two sides also reached a so-called “standstill agreement,” meaning the activist group committed to backing down from the battle for a pre-set period of time. That agreement, however, is expected to expire in January, or 30 days before nominations are due for Kohl’s 2022 annual shareholder meeting.

Now apparently Macellum wants another bite at the proverbial apple. Reuters first reported on Thursday that the activist plans to nominate directors to Kohl’s board at the 2022 annual meeting of shareholders. Duskin could not be reached for comment, and it wasn’t immediately clear if Macellum plans to act on its own or whether Ancora and Legion will join forces again with Duskin’s firm.

Though Kohl’s could not immediately be reached for comment, CEO Michelle Gass, addressing Engine Capital’s sale-or-spinoff call on CNBC’s “Closing Bell” Wednesday, said “the No. 1 priority of the board is to drive shareholder value.”

“We are very aligned with all of our investors in doing that,” she added. “We have ongoing dialogue with lots of investors. We listen to them, we hear their ideas and we take them very seriously.”

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