Kohl's urges shareholders to reject Macellum's proposal prior to the annual meeting.

• Kohl's is resisting the efforts of activist investor Macellum to appoint new directors to its board.
• In a letter to its shareholders on Thursday, Kohl's referred to Macellum's nominees as an "unqualified slate."
• Kohl's is attempting to mobilize its shareholders prior to its annual meeting in May, while undergoing pressure to sell itself.

The retailer pushed back against the activist investor's campaign to add new directors to its board in a letter sent to shareholders on Thursday.

In the letter preceding Kohl's annual meeting with shareholders in May, the retailer deemed Macellum's nominees as an "unqualified slate."

Kohl's stated that Macellum's narrative, claims, and proposals are constantly changing, misinformed, and value-destructive, indicating a short-term and reckless approach that does not align with the long-term, sustainable value that Kohl's aims to drive.

Macellum expressed disappointment, although not surprise, over Kohl's "inaccurate and misleading" letter.

A spokesperson stated that Kohl's can be a valuable source if it is freed from its current board and placed in the right hands, whether in the public or private market. The nominees would bring a significant improvement over the current board and look forward to sharing their vision for value creation.

In February, Macellum, led by Jonathan Duskin, intensified its criticism of Kohl's after months of poor performance in 2021. The activist then nominated 10 directors, including himself, following a call for Kohl's to consider selling itself.

Kohl's has started collaborating with financial advisors and bankers to evaluate potential bids for its business. The company previously turned down an offer from Acacia Research, backed by Starboard, at $64 per share, deeming it insufficient.

This month, HBC, the owner of Saks Fifth Avenue, was among the preliminary buyout bidders who submitted offers. However, HBC declined to comment on the matter.

Kohl's stated in its letter that Macellum's pursuit of a "rush sale at any cost" indicates a short-term strategy that does not align with the interests of the company's shareholders.

Kohl's stated that it is continuing to engage with select bidders, including assisting with further due diligence to refine and enhance proposals.

Kohl's stock price decreased by less than 1% in early trading, but it has increased by approximately 24% year to date, resulting in a market capitalization of $7.9 billion.

Find the full letter sent to Kohl’s shareholders here.