Kohl’s Responds to Reaffirms Commitment to Maximize Value for All Shareholders

Kohl’s Corporation today issued the following statement regarding Macellum Advisors GP, LLC’s (“Macellum”) announcement of its nomination of directors for election to the Kohl’s Board of Directors (the “Board”) at the Company’s 2022 Annual Meeting of Shareholders (the “2022 Annual Meeting”):

Kohl’s believes Macellum’s effort to take control of the Board is unjustified and counterproductive. Kohl’s appointed two of Macellum’s designees, along with an additional mutually agreed upon designee, to its Board pursuant to the 2021 settlement agreement with Macellum and certain other shareholders.  All members of the Kohl’s Board, other than its CEO, are independent.

Macellum’s claim that Kohl’s Board is not equipped to evaluate sale opportunities is groundless. The Board designated its Finance Committee, which is comprised entirely of independent directors, was formed pursuant to the settlement with Macellum and includes one of Macellum’s 2021 designees, to lead the review of any expressions of interest. Additionally, the Company and the Board have engaged financial advisors, including Goldman Sachs and PJT Partners, and have asked Goldman Sachs to engage with interested parties.

Furthermore, Macellum’s claim to be “disappointed and shocked” by Kohl’s rejection of the previously disclosed expressions of interest is disingenuous. Macellum has on multiple occasions stated publicly that Kohl’s is worth “at least $100 per share.”

Finally, Macellum’s comments on the Board’s adoption of a limited-duration shareholder rights plan are misleading. The Board adopted the rights plan to protect shareholder value by ensuring that the Board can conduct an orderly review of any expressions of interest and by preventing any person or group from gaining control of Kohl’s through open market accumulation.

The rights plan does not preclude the Board from considering any offers that recognize the value of the Company. Macellum itself publicly acknowledged on February 4 that the shareholder rights plan Kohl’s adopted is “still a stop, look and listen mechanism.” As demonstrated by Macellum’s latest announcement, the rights plan also does not impact shareholders’ ability to initiate a proxy contest.

It will continue to pursue all reasonable opportunities to drive value, consistent with its fiduciary obligations.

As we previously announced, based on our performance in 2021, we are positioned to exceed our key 2023 financial goals two years ahead of plan. Our work to fundamentally restructure the business allowed us to achieve a nine-year high operating margin in Q3, and record Q3 earnings per share, positioning us to achieve significantly enhanced profitability going forward. These results reflect our strategic focus on transforming the operating model and making Kohl’s the leading omnichannel destination for the active and casual lifestyle.

As one example, we have rolled out 200 Sephora at Kohl’s shops to date and expect to launch an additional 650 shops in the next two years, including over 400 in 2022.  As we noted in our 2021 third quarter earnings, we are seeing an incremental mid-single-digit lift to store sales where we have opened Sephora at Kohl’s shops, and more than 25% of Sephora at Kohl’s shoppers are new to Kohl’s.

The Board will present its recommendation regarding director nominees in Kohl’s definitive proxy statement and other materials, to be filed with the U.S. Securities and Exchange Commission and made available to all shareholders eligible to vote at the 2022 Annual Meeting.