Kohl’s announced Tuesday that CEO Michelle Gass will step down next month.
Effective Dec. 2, Tom Kingsbury will serve as interim CEO, replacing Gass who has “accepted another opportunity,” the company said.
Kohl’s said Kingsbury will lead the company until it finds a permanent successor for Gass, who joined the retailer in 2013 before taking over as its chief executive officer in 2018. Kingsbury, along with other board members, will oversee the search for a new CEO, Kohls said.
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Board Chair Peter Boneparth said commended Gass for her leadership, saying that she helped drive a strategic transformation and expanded its partnerships and brand portfolio while also supported an inclusive and collaborative culture.
However, the announcement comes after activist investor Ancora Holdings Group wrote a letter to the board in September, pushing to remove both Gass and Boneparth, who had been with the board since 2008, for what it calls a botched strategy and dramatic sales declines.
Ancora, which owns 2.5% of outstanding shares in the department store chain, has pressured the company to turn things around and has been able to get three of its directors installed on the company board.
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“Ultimately, Kohl’s needs leadership that can design and implement a precise turnaround strategy to ensure the company averts peril and starts producing enhanced value for shareholders over the long term,” the letter said.
Kohl’s board disagreed and stood behind Gass and her team even after the company reported another challenging quarter in August.
“Second quarter results were impacted by a weakening macro environment, high inflation and dampened consumer spending, which especially pressured our middle-income customers,” Gass said in its earnings report. “We have adjusted our plans, implementing actions to reduce inventory and lower expenses to account for a softer demand outlook.”
Even though stores open for at least a year saw sales decline 7.7% during the quarter, Gass said the company was “pleased to deliver outsized performance in the nearly 600 stores which have been refreshed and elevated, featuring Sephora as a key cornerstone.”
The Associated Press contributed to this report.