An activist investor is threatening to sue Kohl’s, alleging that the department-store chain withheld news about its weak performance earlier this month — even as shareholders voted to reelect its board.
The embattled retailer, which earlier this month won a proxy battle against Macellum Advisors over whether to retain its board of directors, surprised Wall Street on Thursday with disappointing first quarter results.
Kohl’s has put itself on the block and final bids are due in a couple of weeks. But as exclusively reported by The Post on Thursday, some bidders were alarmed by Kohl’s financial results and may now be rethinking their offers.
“It was alarming to learn yesterday that the current board appears to have withheld material information from shareholders about the state of Kohl’s in the lead-up to this year’s pivotal annual meeting” on May 11, Macellum managing partner Jonathan Duskin said in a statement.
Specifically, investors should have been told that Kohl’s financial results took a nosedive in the first quarter and that two key executives were leaving the company ahead of their May 11 vote on whether to keep the current board of directors, according to Macellum, which has reported a 5% stake in the company.
“We are actively exploring claims against the board and will take legal action, if necessary,” Duskin added.
Kohl’s did not immediately respond to a request for comment. Its shares were recently down by more than 10% on Friday to about $40.
In addition to slashing its sales and profit forecast on Thursday in light of a 5.2% comparable sales decline in the first quarter, Kohl’s said this week that its chief merchandising officer and chief marketing officer are leaving the company.
Macellum has claimed that Kohl’s should sell itself or change its leadership, arguing that competitors are gaining market share at its expense.