Last week Kohl’s shareholders rejected a bid from activist investors to take over the board, voting to leave the company’s board of directors intact.
Earlier this year private equity firms Sycamore Partners and Leonard Green & Partners made offers to buy Kohl’s.
“Retail analysts said the recommendations proposed by the investors, such as spinning off the company’s e-commerce business or selling store real estate, could be catastrophic for the company even if they create value in the short term,” Wisconsin Public Radio reported.
Wisconsin Public Radio, May 11, 2022: Kohl’s Corp. fends off activist investor board takeover bid
PESP Executive Director Jim Baker told Wisconsin Public Radio (WPR) that he’s worried a private equity takeover of Kohl’s could hurt workers while enriching investors, “We view this vote… as a positive sign, and are hopeful that the leadership of the company and others will take a long-term perspective on ‘how is this successful for everybody’ — for the stores, for their investors, but also for communities, for workers, etc.”
WPR reported how the Private Equity Stakeholder Project “signed on to an open letter to Kohl’s Board of Directors and investors,” that warned about some of the private equity firms seeking to buy Kohl’s.
It also cited a 2019 report that PESP released with United for Respect and other organizations, which found that private equity buyouts of retailers had led to more than a million job losses in the decade to 2019 from bankruptcies, store closures, layoffs, and liquidations.