No-Moat Kohl’s CEO Choice Brings Much-Needed Peace With Macellum; Shares Very Undervalued

In two pieces of separate but related news, Kohl’s announced that interim CEO Tom Kingsbury has assumed the position permanently and that it has signed a standstill agreement with 5%-holder Macellum Capital. We had previously speculated that Macellum might wage a third proxy battle this year (which would have been very costly and potentially damaging), but it is satisfied with Kingsbury’s appointment as Kohl’s CEO. Indeed, Kingsbury originally joined Kohl’s board in 2021 on Macellum’s recommendation. This is not to say that Kohl’s chose him merely to mollify its antagonist shareholder, we believe he is well-qualified, with extensive retail experience that includes more than a decade as narrow-moat Burlington’s CEO. Thus, in our view, he was both a logical and a practical choice.