By Juveria Tabassum
(Reuters) -Kohl’s on Thursday fired CEO Ashley Buchanan, claiming company policy violations, in what will be its third change at the helm in as many years.
The company said a board investigation found Buchanan directed the retailer to engage in vendor transactions that involved undisclosed conflicts of interest.
The CEO ouster adds to a growing list of problems faced by the department store chain, including several quarters of sagging sales due to stiff competition from e-commerce firms and big-box retailers such as Walmart as well as strategic missteps.
Buchanan was named CEO in November, replacing Tom Kingsbury. After he took over as CEO in January, Kohl’s cut about 10% of its corporate workforce to improve profitability.
Buchanan’s removal does not affect Kohl’s financial reporting or other employees, the company said. It named Michael Bender as its interim CEO, effective immediately, and said that a search for a permanent chief executive would begin soon.
“(Kohl’s) desperately needs stability and changes in its business model. However, it’s better to make the move to fire Buchanan rather than let the situation get worse,” Morningstar Research analyst David Swartz said.
Kohl’s shares rose about 6% on Thursday on better-than-expected preliminary first-quarter earnings. The stock has fallen about 52% this year.
Buchanan joined Kohl’s from Michaels Companies, a specialty retailer of arts and crafts supplies, where he was CEO since 2020. He was also the chief merchandising and chief operating officer for Walmart U.S. e-Commerce prior to that.
Kohl’s expects first-quarter comparable sales to fall between 4% and 4.3%, compared with analysts’ average expectation of a 6.34% decrease, according to data compiled by LSEG.
The company expects a loss per share in the range of 20 cents to 24 cents, compared with estimates for a loss of 52 cents.
Buchanan was not immediately available for comment when contacted on LinkedIn.
Kohl’s will report first-quarter results on May 29.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shounak Dasgupta and Anil D’Silva)
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