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Engine Capital, which owns a roughly 1% stake in Kohl’s, said on Monday that the department store has underperformed the S&P 500 as well as other retailers in recent years.
The New York-based hedge fund also said that Kohl’s should consider a strategic review of the whole company and even a sale to a buyer who can give a meaningful premium, adding it believes there are sponsors that would pay at least $75 per share.
Shares of Kohl’s, which did not respond to a request for comment, were up about 3% in premarket trading.
Engine Capital’s proposal comes at a time when retailers have doubled down on their online businesses following the e-commerce boom during the COVID-19 pandemic that drove people to shop online as they avoided crowds at brick-and-mortar stores.
Earlier in October, activist investor Jana Partners urged Macy’s Inc (NYSE:M) to sell its digital business, following which the retailer said it was working with consulting firm AlixPartners to review its business structure.
Hudson (NYSE:HUD)’s Bay Co-owned luxury department store chain Saks Fifth Avenue has said it would spin off its e-commerce segment, following a $500 million investment from private equity firm Insight Partners in the online business.
Engine Capital said Kohl’s e-commerce business alone could be worth $12.4 billion or more. Wall Street Journal first reported the news on Sunday.
