A Kohl’s store in San Rafael, California.
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kohl’s ends talks to sell business to owner of The Vitamin Shoppe Franchise GroupTwo people familiar with the matter told CNBC on Thursday.
People have requested anonymity as a decision by Kohl’s has not been made public.
Representatives from Kohl’s and the Franchise Group did not immediately respond to CNBC’s requests for comment.
This decision by Kohl’s came as stock prices fell and sales fell. It took months of pressure from activist investors to make a sale and shake up the business with a new board of directors. It was not immediately clear which path Kohl would take next.
Funding such a deal was made even more difficult due to volatility in the stock market and the broader economy, as the Federal Reserve raised interest rates to counter rising inflation. Walgreens Boots Alliance Earlier this week, the UK pharmacy chain shelved its plan to sell Boots, saying no third party had made an adequate bid due to the turmoil in global financial markets.
The Franchise Group was considering dropping its offer. Kohl’s is approaching $50 per share, from around $60, CNBC reported last week. One came the change in thinking as the outlook for the retail industry became more and more grim as recession fears escalated.
Franchise Group at the beginning of June Offered $60 per share to buy Kohl’s with a valuation of approximately $8 billion. The two companies then entered a special three-week window during which they could solidify any due diligence and final financing arrangements. This continued to run its course over the past weekend.
Kohl shares closed at $35.69 on Thursday. At one point during the day, the stock touched a 52-week low at $34.33. Kohl’s ended the day with a market valuation of roughly $4.6 billion, its shares are down nearly 28% so far this year.
Earlier this year, Kohl’s received a $64 per share offer from Starboard-backed Acacia Research. but found the offer too low.
Activist firm Macellum Advisors is pushing Kohl’s to consider a sale or other strategic alternatives. since the stove. macellum he was also advocating for Kohl’s to renew its management team.He argues that the retailer under CEO Michelle Gass has underperformed its peers in recent years.
Macellum did not immediately respond to a request for comment.
But in mid-May, Kohl’s shareholders Voted to re-elect the company’s current list of 13 board membersthus defeating Macellum’s proposal.
In recent weeks, the outlook for the retail industry has become even more bleak. consumers withdraw their spending in certain discretionary categories such as household goods and clothing amid the threat of inflation and an economic slowdown.
high end furniture chain right Wednesday Lowered revenue forecast for fiscal year 2022predicts softer consumed demand for its products in the back half of the year. Bed Bath and Beyond saw its sales fall in its most recent quarter, and fired its CEO.
Companies are also seeing inventories pile up as shipments of goods arrive later than planned due to supply chain disruptions. big box retailer Aim in early June warned investors He said his profits will take a short-term hit as he flags unwanted products, cancels orders, and takes aggressive steps to get rid of excess inventory.
kohl’s Sales for the quarter ended April 30 It fell from $3.89 billion to $3.72 billion in 2021. Announcing these figures in mid-May, the retailer also lowered its profit and revenue forecasts for the full fiscal year, further blurring the picture for a possible deal.
