Analyst Note| David Swartz |
No-moat Kohl’s announced that it has reached an agreement with the group of activist shareholders who have been pushing for board seats and strategic changes. As part of the agreement, two of the activists’ board nominees, Margaret Jenkins and Thomas Kingsbury, will join Kohl’s board. Jenkins has primarily worked in marketing in the food-service industry. Kingsbury recently retired as CEO and chairman of narrow-moat Burlington, a direct competitor of Kohl’s. He will join Kohl’s board’s finance committee, which will give him a role in capital allocation decisions. Kohl’s will also add Christine Day, former CEO at narrow-moat Lululemon, to the board. Day was credited with building the athleisure leader in the years after its IPO but reportedly clashed with mercurial founder Chip Wilson. In addition, Kohl’s announced that two current board members will retire within the next year. We view these as beneficial changes to the board which, as the activists had argued, has been lacking in apparel retail and manufacturing experience.