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Key Takeaways
- Kohl's on Thursday said it had terminated CEO Ashley Buchanan "for cause" and appointed board chair Michael Bender as interim CEO.
- An investigation found Buchanan allegedly had Kohl's enter a multi-million agreement with a consulting group that included a personal contact, the company said in an SEC filing.
- Shares of Kohl's were up more than 8% in trading Thursday.
Kohl's fired CEO Ashley Buchanan after he allegedly directed the company to enter a multi-million dollar agreement with a group that included a personal contact, the company said.
Kohl’s (KSS), in a filing to the Securities and Exchange Commission, said that an investigation by outside counsel found Buchanan had violated company policy. The filing stated that he allegedly instructed Kohl’s to work under “highly uncommon” and “favorable terms” with a vendor founded a personal contact. Buchanan was also said to have gotten Kohl’s into a multimillion dollar contract with a consulting group that included the individual.
Buchanan who assumed the role in January this year allegedly did not disclose his relationship with this woman, according to The Wall Street Journal. Buchanan could not be reached for comment immediately by Investopedia.
Kohl's stock was recently up more than 8%. Its shares lost half their value so far this year. The struggling retailer has also changed its top executives in recent years.
The board viewed Buchanan's behavior as grounds for removal, the company said in a press release Thursday. Kohl’s said the termination was "unrelated to the company's performance, financial reporting, [and] Results of Operations” in a Press Release.
Kohl's has appointed board chair Michael Bender interim CEO and will hire a "leading search firm" to help identify a permanent leader, the company said. Bender will still be on the board of directors, but he will no longer be the chair.
Buchanan assumed the leadership of the company in January after Tom Kingsbury stepped down less than two years earlier. Kohl’s claims it alienated loyal customers by ignoring products they loved while attempting to reach a wider audience with new products. The retailer also said that it needed to improve its reputation as a retailer who offers value.
“Kohl’s has a strong foundation of more than 1,100 conveniently located stores nationwide, serving over 60 million customers," Bender said in a press release. "We will continue to build on this foundation as we enhance the value we deliver to our customers and set the stage for meaningful operational and financial progress.”
This article was updated since its first publication to include new information and stock market data.
