(Reuters) – A group of activist investors with a combined 9.5% stake in Kohl’s Corp said on Monday it has nominated nine directors to the troubled department store chain’s board, as it looks to improve profits at the company.
Kohl’s shares, which lost 20% in value last year as the company’s sales declined further due to the COVID-19 pandemic, rose 6.3% in premarket trading.
The group including Macellum Advisors GP LLC, Ancora Holdings Inc, Legion Partners Asset Management LLC and 4010 Capital LLC is pushing the company to add directors with retail experience, reduce inventory levels and consider a sale-leaseback of some of its real estate.
The investors believes Kohl’s could generate more than $10 in annual earnings per share within the next few years and drive its stock price twice as high current levels.
Kohl’s like other U.S. department stores was struggling to boost sales even before the COVID-19 pandemic, as consumers shifted to online-centric, off-price and deeper-pocketed big-box retailers.
The group’s stake and nominations were first reported by the Wall Street Journal on Sunday.
Kohl’s reiterated it statement from Sunday night that the company’s board and management team have been engaged in discussions with the investor group since early December and was open to new ideas.
(Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli)
