June 22, 2022
Franchise Group, the preferred contractor for acquisition Kohl’sis in discussions to keep the retailer’s top management team, including CEO Michelle Gass, if the sale is finalized, three sources familiar with the matter said.
Franchise Group, which owns brands including Vitamin Shoppe and FriendHome Furniture, entered a tender for Kohl’s in April and earlier this month agreed to three-week exclusivity talks after offering to pay around $60 a share.
Franchise Group executives have shown confidence in Gass and members of her management team, the sources said, noting that Franchise Group is known to buy businesses with teams executive team. The sources requested anonymity to speak of private discussions.
Gass directed the sale, rooted in demand from activist investors, and in May resisted Macellum Advisors’ offer for Kohl’s board seats. Investors seem to agree with the company that hiring new directors now could disrupt the sales process.
Gass, who joined Menomonee Falls, the Wisconsin-based retailer in 2013 as its chief customer officer, has been CEO since May 2018.
A Kohl’s representative could not be reached and a Franchise Group representative did not immediately respond to a request for comment.
Kohl’s in May cut its earnings forecast for the year, warning of weaker sales amid high inflation, even after it tried to bring in more customers through a partnership with Amazon and beauty retailers Sephora.
As the sales process heats up, questions surround the future of department store top executives. In May, Kohl’s said its chief sales officer and chief marketing officer would be leaving the company soon, news that sent stock prices lower.
Reuters reported in April that Franchise Group had entered the tender for Kohl’s. read more
Since then, bidders have submitted their final and best offers below the indicated bids, reflecting the downturn in the market and the US retailer’s sluggish business.
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