BOSTON (Reuters) – Kohl’s Corp investors on Wednesday rejected activist investment firm Macellum Advisors’ efforts to replace 10 board directors at a time the retailer began trying to sell itself.
The U.S. department store chain said all 13 Kohl’s directors have been re-elected according to a preliminary vote tally.
Kohl’s came under fresh pressure from Macellum this year when the hedge fund, led by veteran retail investor Jonathan Duskin, said management and the board were not doing enough to improve business.
Kohl’s CEO Michelle Gass, who has been at the helm since 2018, has rolled out partnerships with beauty products retailer Sephora and online retailer Amazon.com Inc which have been popular.
Duskin, whose firm owns roughly 5% of the company, proposed taking control of the board to oversee review of alternatives like selling the company or for selling and then leasing back its real estate more aggressively.
Kohl’s, valued at $6 billion, countered that its high-caliber board has the right experience and expertise to execute the company’s strategy. Some investors felt the current board should be supported as it evaluates offers to acquire the company.
“While we have had differences with Macellum, this Board is committed to serving the interests of all our shareholders,” board chairman Peter Boneparth said in a statement.
Recommendations were mixed from proxy advisory firms that often guide investor votes. Institutional Shareholder Services recommended investors elect two Macellum nominees while Glass Lewis recommended investors back all 13 Kohl’s nominees.
Kohl’s share price fell 5.5% on Wednesday to close at $46.65.
“The board should not misconstrue today’s result as a ringing endorsement of its preferred operating plan, which has been met with considerable market skepticism,” Macellum’s Duskin said in a statement.
“This vote was a shareholder referendum for a sale, and we look forward to learning of an announced transaction on the quickest possible horizon,” he added.
A year ago Macellum, along with two partners, pushed for changes at Kohl’s but decided to drop that challenge when Kohl’s expanded the size of its board by three directors.
(Reporting by Svea Herbst-Bayliss in Boston with additional reporting by Uday Sampath Kumar , Editing by Louise Heavens, Tomasz Janowski and David Gregorio)
