The Kohl’s Corporation (NYSE: KSS) stock price fell 4% after the company scrapped its full-year forecasts citing an uncertain retail environment combined with significant macroeconomic headwinds.
YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The abrupt departure of its former CEO, Michelle Gass, was another reason the company withdrew its full-year forecasts. In addition, the company has been under intense pressure from activist investors, including Macellum Advisors and Ancora Holdings, to change its business model and leadership.
The department store chain finally bowed to the pressure. It announced the departure of its CEO Michelle Gass who has been at its helm since 2018 and was responsible for steering the retailer through the pandemic lockdowns and a significant transformation.
Levi Strauss quickly hired Michelle Gass as its President, and she is set to take on the CEO role 18 months later as Chip Berg retires. Many were surprised when Levi Strauss chose Michelle for the role, given her history at Kohl’s.
The move signals that Levi Strauss thinks Michelle has the right skills and experience to lead its next growth phase, given her achievement at Kohl’s despite the retailer’s recent troubles. As for Kohl’s, the activist investors will continue applying pressure to the company until they have their way.
Ms Gass kept colliding with the activist investors who wanted to sell the department store’s prime real estate properties and lease them back to the company. Privet equity funds and similar entities are known for such demands, given their ultimate goal is to make a quick profit while saddling companies with massive debt.
Kohl’s is likely to give the activist investors want they want since they will significantly influence the company’s choice of CEO. Still, the question remains, what will happen to Kohl’s once the activist funds have gotten what they want, which is a profitable exit? Only time will tell.
KSS stock is currently trading within a moderate price range that has been in place since July, and shareholders hope it can break above the level and head higher.
*This is not investment advice.
Kohl’s (KSS) stock price.
Kohl’s (KSS) stock price fell 4.09% to trade at $28.58, falling from Wednesday’sclosing price of $29.80.