Activists misdiagnose retailer disease

Dillard's

28/01/2022 16:27

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Jonathan Guilford
    NEW YORK, Jan 28 (Reuters Breakingviews) - Macellum wants
Kohls to break up, after activists similarly pushed Macy’s and
Dillard’s. Carving up the $8 bln department store may help a
takeover. But Macy’s activists have hit snags. And as Eddie
Lampert’s plunge into Sears shows, financial engineering can
worsen retailer woes.
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    CONTEXT NEWS
    - Activist shareholders including Macellum Capital
Management began pressuring U.S. retailer Kohls in February
2021, citing a history of underperformance. In April, the two
sides reached a settlement that saw three new members appointed
to the board. 
    - In December, investor Engine Capital called for the
company to separate its e-commerce business and run a sale
process. In January, Macellum issued a new letter, criticizing
continued underperformance and also calling for the company to
separate its e-commerce unit and sell its real estate, or
explore a sale. 
    - On Jan. 24, Acacia Research, a holding company backed by
activist Starboard Value, disclosed submitting a proposal to
Kohls to acquire the company for $64 per share in cash. Sources
previously told Bloomberg that private equity firm Sycamore
Partners is considering a bid for Kohls, while Oak Street Real
Estate Capital is interested in a transaction for the company’s
real estate, according to Reuters. 
    - Macellum is now pushing Kohls to appoint a new board
member to oversee a sale process, sources told Reuters. 

 (Editing by Lauren Silva Laughlin and Sharon Lam)
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