Activist investor Macellum Capital Management is back on the attack against lagging department store retailer Kohl's (KSS) less than a year after reaching a settlement agreement.
In a scathing new letter on Tuesday, Macellum says Kohl's is a company "without accountability" and the executive team is "incapable" of developing the right assortment and value proposition that resonates with shoppers.
"The Kohl's board of directors needs a shareholder in the room that has a sense of urgency," said Jonathan Duskin, Macellum managing partner, on Yahoo Finance Live. "There is a sense of entitlement on the board and also combined with complacency."
Back in April 2021, Kohl's settled with an activist group led by Macellum. The settlement involved a board shakeup and the approval of a new $2 billion stock buyback plan.
Macellum contends this go around that Kohl's has done nothing to drive shareholder value, pointing to a 22% plunge in the stock price since the two reached a settlement on April 13.
The activist investor is pushing for a board refresh and for Kohl's to pursue strategic alternatives such as spinning off its e-commerce operations, selling the company or spinning off billions in dollars of real estate it owns.
Duskin thinks Kohl's is easily worth $100 a share if it were to truly sign off on these value creating moves. Kohl's shares currently trade at $50.
"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 7 investor day during which we will share more details about our strategic initiatives and capital allocation plans," a Kohl's spokeswoman told Yahoo Finance via email.
Kohl's didn't respond to another email request to make CEO Michelle Gass available for interview to respond to Duskin's claims.
To be sure, Kohl's is in a pickle right now.
Besides Macellum, Engine Capital launched a new activist attack of its own on Kohl's a few weeks ago. In its own sharply worded letter, Engine Capital demands Kohl's considers a sale in its entirety or splits off its online business (similar to what activist investor Jana is begging Macy's to do).
Both set of activists have a strong case.
While Kohl's has garnered favorable headlines for its partnerships with Amazon (for store returns) and more recently cosmetics giant Sephora, the company simply has not delivered on several fronts. Operating margins and sales growth have lagged many rivals since Gass took over at CEO in May 2018.
Kohl's shares are up 6% the past two years, underperforming the S&P 500's 38% gain. Target's stock is up 88%, while Macy's has notched a 45% improvement.