“I guess I’m just into bad boys…” - Kohls board, probably

Ashley Buchanan, CEO of Kohls, just got the Trump treatment as he was just fired for cause. Not “resigned to spend more time with family” or “pursuing other opportunities”---none of that. Instead, the company dragged his name out into the open, slammed it on the table and proceeded to say “GTFO”. 

(Source: Giphy) 

In short, Buchanan, who had been CEO for roughly five minutes, thought it was a good idea to funnel millions of dollars in consulting contracts to a woman he used to sleep with. That woman is Chandra Holt, a former Walmart colleague who now slings vitamin-infused coffee under the name “Incrediscrew” err… “Incredibrew”. 

Kohl’s didn’t name her in the release, but The Wall Street Journal did, and the dots aren’t exactly challenging to connect. The company confirmed Buchanan failed to disclose a “personal relationship” with a vendor. The board called in the audit committee. The audit committee called in an outside investigation. And the outside investigation confirmed that, yes, the CEO was directing business to someone he had a personal and romantic history with—on terms that were, in their words, “highly unusual.” Translation: This was so blatantly shady we're surprised you even tried. 

(Source: New York Post) 

Of course, the company’s now pretending this has no impact on operations. But then again, this is that same company that’s been bleeding market share for years, and just lost its third CEO in the last three years. Buchanan showed up in January, spouted some cost-cutting nonsense, announced layoffs, and then started writing checks to his ex like it was a joint checking account. Now he's gone, and interim CEO Michael Bender is on damage control, telling employees in an all-hands email to “stay focused on what matters most”---which really just means “ignore the flaming wreckage of the org chart and keep folding those jeans”.  

As for the board, they’re painting this as a one-man problem. “No other company personnel were involved”. But the real question everyone should be asking, is who the hell is picking these CEOs? Spoiler: It’s the board. Kohs has been a revolving door of failed leadership and bad calls. Michelle Gass bailed for Levi’s. Tom Kingsbury lasted less than two years. Now Buchanan gets forcibly ejected after violating the most basic tenet of corporate ethics—don’t screw the vendor, and definitely don’t do it on the company’s dime LOL. 

(Source: Bloomberg) 

Oh, and just to add insult to injury here, Kohl’s just posted its twelfth straight quarter of declining revenue. Twelve. That’s three full years of slowly dying in public. They’re closing stores. They’re laying off corporate staff. They’re trying to convince people that fine jewelry and Sephora pop-ups are a strategy. Meanwhile, the stock has cratered 50% this year, and the company’s bragging that comp sales were only down 4%. Lord have mercy. 

And yet, when news broke that Buchanan was out, the stock popped almost 10% probably because this was the most exciting news Kohls has had in years (read: bad publicity is good publicity, I guess). As for Buchanan, he’s being forced to pay back $2.5 million from his signing bonus. He’ll lose all his equity awards. And honestly, he’ll probably land another gig in eight months at some mid-tier private equity-backed retailer whose A-ok with corporate incest.

(Source: Giphy) 

For now, investors are praying to God that the next CEO doesn’t show up with a burner phone and a vitamin coffee fetish. As for the board's next pick? Well, they’re clearly into the bad boys, so I’m not holding my breath for the next so-called solution. So yeah, entertaining stuff in corporate America these days. As always, stay safe out there and place your bets accordingly. Until next time, friends…

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Stocks.News does not hold positions in companies mentioned in the article. .