Observers of a potential Kohl’s acquisition say enthusiasm for a deal has waned after the retailer turned in a shoddy sales update, the New York Post reports.
The department store chain reported a 5.2% drop in comparable sales as consumers tightened their wallets amid creeping inflation. Kohl’s accordingly cut its profit and sales outlook for the rest of the year.
Kohl’s has requested “final bids to be submitted in the coming weeks,” though appetites for a deal have now “likely been extinguished,” according to the Post’s sources.
Those sources cite the poor sales, as well as a lack of transparency from the company related to a recent effort to block replacements on its board of directors. An activist investor attempted to replace 10 of the board’s 13 members through a proxy fight, but shareholders – who did not know about the company’s sagging performance – voted to affirm the current board.
“Basically the company knew their results stunk and they didn’t tell anyone and they got the shareholder vote for their board of directors,” a source said.
Read more at the New York Post.