Kohl’s Corp. once again responded to activist investors Macellum Advisors GP, LLC on Monday in a letter to shareholders laying out the skills and expertise of the company’s board, which Macellum seeks to replace.
Kohl’s is just one of a number of companies across the consumer space that has gotten the attention of activist investors lately. Certainly, activist investor activity in the consumer space isn’t new. But right now, there are companies coming out of the pandemic in a strengthened position while others float somewhere in the middle of thriving and declining, like department stores, which were on a downward path prior to COVID but have seen some improvement more recently.
Cowen analysts wrote in a March report that there are some trends, like the growth of online grocery and e-commerce, premium pet food, and a focus on health and fitness, that will stick around once the pandemic comes to an end. This bodes well for companies like Target Corp. TGT, +0.58%, Walmart Inc. WMT, -0.76%, Nike Inc. NKE, -0.36% and Freshpet Inc. FRPT, +2.30%, analysts say.
Companies are currently faced with hurdles that are out of their control, like sky-high inflation, supply chain disruption, and geopolitical upheaval, putting the response from business leaders in sharp focus.“In [activist investors’] minds, I would imagine, they’re there to help and assist management to rebound from the issues they’re having,” Kotlyar said.The solutions being offered aren’t all getting rave reviews.
There are many reasons why activists target a company. In the case of Guess Inc. GES, +0.50%, Legion Partners aims to remove co-founders and directors Paul and Maurice Marciano after multiple media reports of sexual misconduct and assault, and, according to Legion, a failure to adequately address them. On Monday, Legion Partners issued another letter pushing back against materials released by the company and arguing that the brothers threaten the Guess brand, its reputation and its valuation.