Customers leave a Kohl store on November 12, 2015 in San Rafael, California.
Justin Sullivan | Getty Images News | Getty Images
A group of activists looking to take control of Kohl’s board published a letter on Friday saying the retailer’s last quarterly financial results have been weak and demonstrate the need for a redesigned strategy.
“The board appears to be satisfied with only slightly better performance than the worst retail companies,” 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 malls, which has significant advantages, but it also means that Kohl’s competes with companies outside the malls such as TJX Companies, Ross Stores, Target, Old Navy and Burlington,” he added.
The investor group – Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital – holds 9.5% of Kohl’s capital.
In late February, Kohl’s rejected the attempt to take control of its board, arguing that it would undermine its drive to renew its business.
When Kohl’s released fourth quarter earnings earlier in the week, it surpassed Wall Street estimates and pointed to stronger growth in 2021, as its initiatives to boost sales growth (such as the partnership with makeup retailer Sephora ) must be established. Kohl’s also announced that it will reinstate its dividends and repurchase shares.
In addition, it revealed some new details to appease a number of activists’ frustrations, including the fact that Kohl’s added more than 2 million new customers in 2020 thanks to its Amazon return service.
The group of activists said on Friday, however, that it remains skeptical that Kohl’s Amazon return program will increase earnings.
Kohl’s shares fell less than 1% in the pre-market. The stock has risen about 50% in the past 12 months. Kohl’s has a market capitalization of $ 8.64 billion, which is higher than Nordstrom’s and Macy’s.
A Kohl’s representative did not immediately respond to CNBC’s request for comment.
Read the full letter from the activists here.