In a move that could make key activist Macellum Advisors one happy investor, the Kohl’s board named Tom Kingsbury its permanent CEO.
Kingsbury—a 40-year-plus retail veteran—has served as interim CEO since Dec. 2 when former top brass Michelle Gass left to join Levi Strauss & Co. as president and CEO-to-be when current CEO Chip Bergh steps down next year.
And with Kingsbury firmly ensconced in the CEO role, Wall Street is likely to breathe a sigh of relief as he takes the reins of a much-need strategic turnaround. Kohl’s didn’t give any guidance at its last earnings update considering no one was steering the ship. The company also scrapped the prior outlook for the year. Investors can get jittery when there’s an interim CEO who’s often just a placeholder not getting down and dirty in the business of fixing whatever’s going wrong.
In a statement, Kingsbury said his appointment comes as a “pivotal time for Kohl’s.”
“I am excited and energized to work with our talented team to elevate our performance and create value,” he said. “During the last few months, I have seen the passion and dedication of the Kohl’s team and the unique value we can bring to our customers nationwide. I look forward to partnering with the Board and leadership team to build on our strengths and deliver on our strategy for our shareholders and other stakeholders.”
Board chairman Peter Boneparth pointed to Kingsbury’s “track record” as proof of his prowess.
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“Tom’s exceptional track record growing retail businesses and his deep knowledge of Kohl’s makes him the right choice for Kohl’s next CEO. Since joining the Board, Tom has added valuable insight and perspective, and as interim CEO, he has demonstrated strong leadership and made a meaningful and positive impact on the organization,” he said. “The Board has the full confidence in Tom’s ability to drive the business forward, focusing on accelerating sales and profitability, and we look forward to our continued work together.”
Macellum began agitating for change in February 2021 as it pushed the retailer to maximize shareholder value. By April 2021, the activist and Kohl’s reached a settlement that saw former Lululemon CEO Christine Day, Margaret Jenkins and former Burlington Stores CEO Kingsbury join the Kohl’s board.
In addition to his stint at Burlington as CEO and chairman, Kingsbury is a retail veteran who has also held leadership positions at Kohl’s and The May Department Stores Co. When he was at Kohl’s from 2006 to 2008, Kingsbury served as senior executive vice president—information services, e-commerce, marketing and business development. He stepped down from the CEO role at Burlington in September 2019 and retired as Burlington’s executive chairman on Feb. 1, 2020.
Neil Saunders, managing director of London consultancy GlobalData, said the appointment of Kingsbury is a “safe choice” for a business that is struggling from internal missteps.
“A point of interest in the appointment is the standstill agreement with activist investor Macellum, which will refrain from various activities for a multi-year period,” Saunders said. “While this is to be welcomed as it will give the new CEO a chance to catch his breath and make necessary changes, we are also concerned that Kohl’s may have agreed to consider various measures such as selling off real estate which activists have long wanted. We retain our view that these kinds of actions are not in the long-term interests of the company.”
Still, Saunders said Kingsbury needs time to set out his strategy to get Kohl’s back on track.