Kohl’s tried to reach an agreement with Amazon. It was not enough.

A customer pulls out a box while leaving a Kohl’s Corp. department store in Woodstock, Georgia, USA, on Monday, November 23, 2020. For the first time on Black Friday, more consumers intend to shop at line than in stores. a change driven by the coronavirus pandemic, according to a Deloitte survey. Photographer: Dustin Chambers / Bloomberg via Getty Images

(CNN) – When Michelle Gass took over as CEO of Kohl’s in 2018, she tried to get creative to attract more shoppers to stores.

The company had just struck a deal with Amazon the previous year to allow customers to take their returns to select Kohl locations. The hope was that the deal would attract younger consumers who would later stay and buy. Kohl’s expanded the partnership to all stores during Gass’s tenure, saying in November that it was “satisfied” with the program.

Kohl’s has tried several other new approaches to attracting customers in recent years, including expanding its sportswear assortment and leasing space in a handful of stores to Planet Fitness and Aldi.

Such efforts have not been enough to defend against activist investors, who now want to change things.

An activist group, which includes Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital LLC, said Monday that it has taken a 9.5% stake in Kohl’s and has nominated nine new members to its board of directors. The news, first reported by the Wall Street Journal, sent Kohl’s shares up 8% in Monday’s trading.

Their efforts come as traditional department stores have been squeezed in recent years by Amazon and online brands, big box stores like Target, and discount clothing chains like TJMaxx. The pandemic forced department stores to temporarily close and has affected foot traffic in stores. JCPenney and Neiman Marcus filed for bankruptcy in May.

The activist group has had some success in the past. In 2019, he made a similar push at Bed Bath & Beyond. That chain revamped its directory and installed a new CEO in response.

The group said in a 27-page letter to Kohl’s investors on Monday that it is pushing for changes at Kohl’s because the department store chain’s stock price has underperformed “chronically underperforming.” competitors. Over the past decade, Kohl’s has lost market share, sales have stagnated and profit margins have shrunk, the group said.

These problems started before the pandemic, the group said. Kohl’s operating margin fell from 11.5% in 2011 to 6.1% in 2019, while sales stabilized during the stretch. The group pointed to “repetitive and oversold merchandise,” “disappointing new brand launches” and “private label failure” for contributing to Kohl’s poor sales. He also said the Amazon deal was “costly” for Kohl’s and that Kohl’s has not shared “detailed information about the program” with investors.

A Kohl’s spokesman said in a statement that the company has been in talks with the investment group since December and “remains open to hearing new ideas.” The company said it was confident that a new strategy, outlined in October, “will accelerate growth and profitability.”

The strategy calls for Kohl’s to expand its selection of sportswear and outdoor items, create a larger beauty business, and enhance its women’s clothing business. Kohl’s said that since the strategy was announced, seven Wall Street analysts have improved their shares and their share price has risen more than 150%.

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