View outside Kohl’s store in Miramar, Florida.
Johnny Louis | Getty Images
Kohl’s said on Tuesday that it does not plan to sell any of its properties and then lease it back, despite a group of activists pressuring the company to follow this path to raise money.
Investors want Kohl’s to pursue a sale and leaseback program, saying it can yield more than $ 3 billion. The group is formed by Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital, and has a 9.5% stake in Kohl’s.
Activists also proposed a list of directors for Kohl’s board, which was rejected by the large retailer. Kohl’s said the group’s suggestions would only disturb the momentum it saw recently as it projects growth in 2021.
On Tuesday, in a profit presentation, Kohl’s said it had employed sale-leaseback transactions in the past, “when it was a clearly efficient cost of capital”, including in May last year.
Making more sale-leaseback deals, however, would likely harm Kohl’s investment-grade status and increase rental expenses on its balance sheet, the company said. He further explained that he must own a certain amount of assets in order to be in compliance with his debt contracts.
Big retailers Big Lots and Bed Bath & Beyond closed sale-leaseback deals last year, bringing in both hundreds of millions of dollars, with an affiliate of private equity firm Oak Street Real Estate Capital buying part of its assets.
Macellum Chief Executive Jonathan Duskin, who is one of the activists targeting Kohl’s, told CNBC in an interview late last month that Oak Street would be a likely bidder for Kohl’s properties as well.
Kohl’s shares rose more than 1% at noon on Tuesday. The stock has risen more than 50% in the past 12 months. Kohl’s has a market capitalization of $ 9.13 billion, which is higher than Nordstrom’s and Macy’s.