Business

Shareholders Say Kohl’s Misled Them About Strategic Plan in New Suit – Footwear News

Shareholders Say Kohl’s Misled Them About Strategic Plan in New Suit – Footwear News #Shareholders #Kohls #Misled #Strategic #Plan #Suit #Footwear #News Welcome to Viasildes, here is the new story we have for you today:

You Can Click Here To View Restricted Videos/Images in this Article

Kohl’s has been named in a new lawsuit that accuses the retailer of misleading shareholders.

In a class action lawsuit filed in a Wisconsin court on Friday, Kohl’s shareholders said the retailer “made materially false and misleading statements regarding the company’s business, operations, and compliance policies,” including failing to disclose that the company’s strategic plan was not engineered in a way to help the company achieve its goals.

Kohl’s outlined a strategic growth plan in October 2020, which centered on expanding its operating margin between 7% and 8% and positioning the retailer “for long-term success.” In addition, Kohl’s announced that the company would become “the destination for active, casual and beauty for the entire family from the most trusted brands, always delivering quality and discovery.”

According to the suit, Kohl’s “overstated” its success in executing this plan and failed to disclose certain information to shareholders in advance of the company’s annual meeting in May.

Kohl’s did not return FN’s request for comment.

Kohl’s in May reported lower than expected results in the first quarter of 2022 amid weakened demand and inflationary pressures. First quarter net sales decreased 5.2% to $3.72 billion compared to $3.9 billion in the same period last year. Net income came in flat compared to the same period last year at $14 million in the first quarter of 2022. These results, the complaint argued, took shareholders by surprise, as they expected to see better results from the strategic plan. The suit claims that if the plaintiffs had known the truth about Kohl’s earlier, they would not have purchased shares.

The lawsuit comes on the heels of another troubling quarter for Kohl’s. The retailer in August cut its outlook for the year after reporting a hit to its business in Q2 from macroeconomic headwinds. Kohl’s CEO Michelle Gass said inflation and weaker consumer spending, especially among middle-income customers, impacted the company’s results in the quarter.

Kohl’s also failed to complete a negotiation to sell itself a few months ago. After entering into exclusive negotiations in early June with Franchise Group to discuss a potential sale of its business, the Menomonee Falls, Wis.-based retailer said on July 1 that it withdrew from the process. The offer, initially priced at $69 per share, was downgraded to around $60 per share on June 6 and revised again to $53 per share on June 29.

Private-equity firm Sycamore Partners reportedly also dropped its initial $65 per share bid to a deal priced in the mid-$50s per share.

Despite the failed deal, Kohl’s said its board was still “open to any opportunities to maximize shareholder value.” According to a report last week, Kohl’s is in talks with private equity firm Oak Street Real Estate Capital LLC to discuss potentially selling up to $2 billion worth of property.

Click Here To Continue Reading from Source

Related Articles

Back to top button