Potential sale of Kohl’s called off
July 1, 2022
Kohl’s Corp. has ended negotiations with a potential buyer, citing both financing and retail conditions.
The Wisconsin-based department store chain, which has two locations in Sioux Falls, announced the decision Friday.
“After engaging with more than 25 parties in an exhaustive process, FRG (Franchise Group Inc.) emerged as the top bidder, and we entered into exclusive negotiations and facilitated further due diligence,” said Peter Boneparth, chair of Kohl’s board of directors. “Despite a concerted effort on both sides, the current financing and retail environment created significant obstacles to reaching an acceptable and fully executable agreement. Given the environment and market volatility, the board determined that it simply was not prudent to continue pursuing a deal.”
Initially, FRG proposed to buy Kohl’s for $60 per share, but submitted a revised offer of $53 per share without a set financing arrangement. The company includes businesses such as The Vitamin Shoppe, Pet Supplies Plus and Sylvan Learning, all of which have locations in Sioux Falls.
Boneparth said the company will work to bolster shareholder value. It plans to accelerate its share repurchase program after it announces second quarter results, which will come Aug. 18.
“As always, the board remains open to all opportunities to maximize value for shareholders, and we look forward to actively engaging with our shareholders as we move forward to ensure we are considering their perspectives in our plans.”
In the news release, Kohl’s offered an update on expectations for second quarter sales.
“As inflationary pressures on the consumer continue, the company is seeing a softening in consumer spending and now expects sales to be down high-single digits for Q2, as compared to our prior expectations of down low-single digits relative to last year.”
Kohl’s noted that it will continue to build its partnership with Sephora, expanding the shop-within-a-shop concept to more than 850 of its 1,100-plus stores by the end of 2023. It also plans to open more than 100 smaller format stores in the next four years.
