Kohl’s shares soared more than 9% in premarket trading Monday after a group of activist investors confirmed it has nominated nine directors to the company’s board, looking to turn the business around and boost its stock.
The group consisting of Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital owns a combined 9.5% stake.
The investors want Kohl’s to add directors with deep retail experience, cut executive compensation, slash inventory levels and consider selling some of its noncore real estate. They estimate the real-estate assets could yield between $7 billion and $8 billion.
The group is hoping to drive the stock price more than two times higher than current levels, through a sale-leaseback program for $3 billion worth of real estate, and a major share repurchase program, it explained in a letter sent to Kohl’s stockholders on Monday.
Kohl’s business was struggling even before the Covid pandemic, as the retailer ceded customers to online players like Amazon, and big-box companies like Target and Walmart. But losses have mounted especially over the past year, as many Americans have stayed at home during the pandemic. Kohl’s total revenue fell 25% to $9.8 billion in the nine months ended Oct. 31, while its losses totaled $506 million, compared with a profit of $426 million one year prior.