Franchise Group in talks to keep Kohl's management team after a sale-sources

Franchise

21/06/2022 23:33

By Svea Herbst-Bayliss
    BOSTON, June 21 (Reuters) - Franchise Group  FRG.O , the
preferred bidder to acquire Kohl's  KSS.N , is in discussions to
keep the retailer's top management team, including CEO Michelle
Gass, if the planned sale is finalized, three sources familiar
with the matter said.
    Franchise Group, which owns brands including Vitamin Shoppe
and Buddy's Home Furnishings, joined the bidding for Kohl's in
April and earlier this month agreed to a three week-period of
exclusive talks after offering to pay around $60 a share.
 urn:newsml:reuters.com:*:nL4N2XT38M
    Franchise Group executives have signaled confidence in Gass
and members of her management team, the sources said, noting
that Franchise Group is known to buy businesses that have
operating teams in place. The sources requested anonymity to
talk about private discussions.    
    Gass has been steering the sale process, sparked by activist
investors' demands, and in May fended off a bid by Macellum
Advisors for Kohl's board seats. Investors appeared to agree
with the company as it argued that seating new directors now
could scuttle the sales process.
    Gass, who joined the Menomonee Falls, Wisconsin-based
retailer in 2013 as its chief customer officer, has been CEO
since May 2018.
    A representative for Kohl's could not be reached and a
representative for Franchise Group did not immediately respond
to a request for comment.
    Kohl's in May cut its earnings forecast for the year,
warning of weaker sales amid high inflation, even after it tried
to bring in more customers through partnerships with Amazon and
beauty retailer Sephora.
    As the sales process heated up, questions swirled around the
future of the department store's top executives. In May, Kohl's
said its chief merchandising officer and chief marketing officer
would be leaving the company soon, news that sent the share
price lower.
    Reuters reported in April that Franchise Group had joined
the bidding for Kohl's.  urn:newsml:reuters.com:*:nL2N2VQ2Z1 
    Since then bidders submitted best and final offers which
were below indicative bids, reflecting the market downturn and
the U.S. retailer's deteriorating business.  urn:newsml:reuters.com:*:nL2N2XG2LK

 (Reporting by Svea Herbst-Bayliss; editing by Richard Pullin)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))