Yahoo Finance’s Julie Hyman and Brian Sozzi discuss how activist investors are pushing Kohl's to sell the company and shake up its board at a time when the stock is plummeting.

Video Transcript

JULIE HYMAN: There is an activist that has been targeting Kohl's. But, A, it's not the first activist, and B, it's not the first attempt by this same activist. So this is becoming a familiar refrain. Brian Sozzi, what are we hearing in this latest attack?

BRIAN SOZZI: Yeah, Macellum, an activist investor that shook up, or tried to shake up, Kohl's last year, and then before that, Bed, Bath & Beyond, they're back on the attack against Kohl's, here, launching a new attack on the company. Which, really, almost comes, I would say, about a year to the date where they settled with Kohl's, got three new board members. And Kohl's raised its stock buyback plan by about $2 billion. But Macellum says, essentially, all these folks are still not getting anything done to drive shareholder value and shares of Kohl's are still under pressure.

And they are, in fact, very correct. So here's one comment that caught my attention from this Macellum note, quote, "We are vexed by management's lack of urgency and insistence, that after another disappointing year, shareholders should wait patiently until March to hear yet another strategy unveiled." Kohl's said it will hold another investor day in March, actually on March 7th, here. Keep in mind, they held an investor day about the same time last year, I believe, where they laid out, essentially, nothing.

And then Macellum going back further, here, they're saying that-- they're accusing Kohl's board of not entertaining proposals to take the company private. So a very lengthy letter, here, really coming attack against a company that has already under attack by another activist, Engine Capital, which attacked the company late last year, pushing for them to spin off their e-commerce business, or their real estate, or just sell the company in its entirety, here.

So at some point, this is going to have to come to a head, of course. Kohl's had in its response to here at Yahoo Finance saying, "The Kohl's board and management team continuously examine all opportunities for maximizing shareholder value. Our strong performance in 2021 demonstrates that our strategy is gaining traction and driving results. We appreciate the ongoing dialogue we are having with our shareholders and look forward to our scheduled March 7th investor day during which we will share more details about our strategic initiatives and capital allocation plans."

But here's my take, by and large, Julie. And we've been covering this debacle at Kohl's, here, extensively. Here we go, it's very rare to see multiple activists take a company to task, here. And that's exactly what we're seeing here. You have Engine Capital involved in the stock. You have Macellum, with a 5% stake in Kohl's, now launching a new attack for a board shakeup, or just more efforts to maximize value.

And what else do you expect, though? You have seen Kohl's shares really decline by double digits under the watch of CEO Michelle Gass since she took over in May 2018. Margins have underperformed many rivals since Gass took over. Target shares are up over 200%. So, by and large, here, this is-- it's getting ugly. It's getting messy. And I'm looking forward to talking to Macellum's Jonathan Duskin, the lead activist, here. That's his company. I'll be talking to him at 1:40 about his campaign here with Kohl's.

JULIE HYMAN: It should be interesting, indeed. Because, as you pointed out, even though they came to a settlement last time, it didn't seem to fundamentally change the goings on at the company.