It's peace —for now — at struggling retailer Kohl's (KSS).
Kohl's said Wednesday it reached an agreement with activist investors Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital. As part of the agreement, Margaret Jenkins, former chief marketing officer at Denny's and El Pollo Loco, will join the board along with former Burlington Stores CEO Thomas Kingsbury.
Former Lululemon CEO Christine Day was identified by Kohl's to join the board, and agreed upon with the activist group. Day is likely to be viewed as a new ally inside Kohl's for its embattled CEO Michelle Gass, as both worked at Starbucks together in executive capacities.
The activists — notching another win with Kohl's after a highly publicized campaign against Bed Bath & Beyond led to a complete executive overhaul — had been pushing to add nine directors to Kohl's board.
Kohl's also created a new finance committee of the board, which Kingsbury will join. The committee will assist the board on capital allocation decisions made by Kohl's — a key issue the activists had voiced. The company also lifted its stock buyback authorization to $2 billion.
A source familiar with the matter tells Yahoo Finance the activist campaign has been a "big wakeup call" to Kohl's otherwise aloof management team. The activist group plans to hold onto its 9.3% stake in Kohl's, the source said.
"I look forward to working with our newly expanded board to further advance our transformative strategy and deliver results for shareholders. Amidst ongoing industry disruption and evolving consumer trends, we are uniquely positioned to build on our momentum and accelerate growth and profitability,” Gass said in a statement.
Now it's time to get to work on fixing everything the activist group outlined in their analysis of Kohl's. The list is long, ranging from overhauling executive compensation to potentially spinning off real estate holdings. All eyes are on whether it will still be Gass and her team making these decisions once the new board members dig in.
For the moment, investors are taking a wait and see stance. Kohl's shares rose slightly in Wednesday trading.
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