Customers leave a Kohl’s store on November 12, 2015 in San Rafael, California.
Justin Sullivan | Getty Images News | fake images
A group of activists seeking to take control of Kohl’s board published a letter on Friday saying the retailer’s latest quarterly financial results were lackluster and further demonstrate the need for a revised strategy.
“The board appears to be satisfied with a slightly better performance than the worst companies in the retail sector,” the group said in the letter to Kohl’s shareholders. “‘The best of the worst’ is not a viable strategy, nor does it satisfy shareholders like us who are looking for superior long-term performance.”
“Kohl’s is enormously well positioned with locations outside the mall, which has significant advantages, but it also means that Kohl’s competes against prosperous players outside the mall like TJX Companies, Ross Stores, Target, Old Navy and Burlington,” he added.
The group of investors – Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital – owns a 9.5% stake in Kohl’s.
In late February, Kohl’s rejected its attempt to take control of its board of directors, arguing that it would disrupt the drive it has had to revamp its business.
When Kohl’s reported fourth-quarter earnings earlier in the week, it beat Wall Street estimates and signaled stronger growth in 2021 as its initiatives to drive sales growth (such as partnering with the makeup retailer are expected to Sephora) take hold. Kohl’s also announced that it will restore its dividend and buy back shares.
In addition, he pointed to some new details to quell a number of activists’ frustrations, including the fact that Kohl’s added more than 2 million new customers in 2020 thanks to its Amazon returns service.
However, the activist group said on Friday it remains skeptical that Kohl’s Amazon returns program will boost profits.
Kohl’s shares fell less than 1% in premarket trading. The stock has risen roughly 50% over the past 12 months. Kohl’s has a market capitalization of $ 8.64 billion, which is larger than Nordstrom’s and Macy’s.
A representative for Kohl’s did not immediately respond to CNBC’s request for comment.
Read the full letter from the activists here.