EXCLUSIVE Franchise Group in talks to keep Kohl’s management team after sale – sources

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A sign marks a Kohl’s department store in the Brooklyn borough of New York, U.S., January 25, 2022. REUTERS/Brendan McDermid

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BOSTON, June 21 (Reuters) – Franchise Group (FRG.O), the preferred bidder to acquire Kohl’s (KSS.N), is in talks to retain the retailer’s management team, including CEO Michelle Gass, if the planned sale is finalized. , said three sources familiar with the matter.

Franchise Group, which owns brands such as Vitamin Shoppe and Buddy’s Home Furnishings, joined the tender for Kohl’s in April and earlier this month agreed to a three-week exclusive talks period after offering to pay around $60 per share. Read more

Franchise Group executives trusted Gass and members of his management team, the sources said, noting that Franchise Group is known to buy businesses that have operating teams in place and does not specialize in setting up. put in place new management teams. The sources requested anonymity to speak about private discussions.

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The sale process was sparked by demands from activist investors, and in May Gass and the board rebuffed an offer from Macellum Advisors for Kohl’s board seats. Investors appeared to agree with the company as it argued that appointing new directors now could scuttle the sale process.

Gass, who joined the Menomonee Falls, Wis.-based retailer in 2013 as chief customer officer, has served as 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.

In May, Kohl’s cut its profit forecast for the year, warning of falling sales amid high inflation, even after trying to attract more customers through partnerships with Amazon and the retailer of Sephora beauty products.

As the selling process intensified, questions swirled around the future of the department store’s top executives. In May, Kohl’s announced that its director of merchandising and chief marketing officer would soon be leaving the company, news that sent the stock price lower.

Reuters reported in April that Franchise Group had joined the tender for Kohl’s. Read more

Since then, bidders have submitted best and final offers that were lower than indicative offers, reflecting the market downturn and deteriorating business for the US retailer. Read more

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Reporting by Svea Herbst-Bayliss; edited by Richard Pullin

Our standards: The Thomson Reuters Trust Principles.

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