Customers leave a Kohl’s store on November 12, 2015 in San Rafael, California.
Justin Sullivan | Getty Images News | Getty images
A group of activists seeking to seize control of Kohl’s board published a letter Friday saying the retailer’s latest quarterly financial results were mediocre and further demonstrating the need for a revised strategy.
“The board appears to be satisfied with just outperforming the worst retail companies,” the group said in its letter to Kohl’s shareholders. “Best of the worst is not a viable strategy, nor does it satisfy shareholders like us who are looking for superior long-term performance.”
“Kohl’s is extremely well positioned with off-mall locations, which has significant advantages, but it also means that Kohl’s will compete with thriving off-mall players such as TJX Companies, Ross Stores, Target, Old Navy and Burlington,” it added .
The group of investors – Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital – owns a 9.5% stake in Kohl’s.
In late February, Kohl’s rejected their attempt to take control of the board, arguing that it would disrupt the momentum it had in revamping its business.
When Kohl reported fourth-quarter earnings earlier this week, it surpassed Wall Street estimates and pointed to stronger growth in 2021 as its initiatives to boost sales growth (such as its partnership with makeup retailer Sephora) are expected will catch on. Kohl’s has also announced it will restore its dividend and buy back shares.
It further brought out some new details to calm activists’ frustrations, including the fact that Kohl added more than 2 million new customers in 2020 thanks to the Amazon returns service.
However, the activists said on Friday that they remain skeptical that Kohl’s Amazon Return program will contribute to the revenue.
Kohl’s shares were up less than 1% in Friday’s premarket. The stock is up about 50% in the last 12 months. Kohl’s has a market cap of $ 8.64 billion, which is greater than Nordstrom and Macy’s.
A representative from Kohl’s did not immediately respond to CNBC’s request for comment.
Read the full letter from the activists here.