Kohl's Dismisses CEO due to Policy Misconduct
Kohl's announced the abrupt departure of its CEO, Ashley Buchanan, following an internal policy violation involving undisclosed conflicts of interest in vendor deals. The four-month tenure of Buchanan, who took over the helm in January, ended on May 1.
The breach centered around Buchanan's involvement in transactions with a vendor connected to a personal acquaintance, resulting in favorable terms for the vendor, and a failure to disclose the relationship as required by the company's ethical guidelines. Kohl's asserted that the issue did not affect the firm's financials or involve any other employees.
This move comes at a challenging time for Kohl's, which has been grappling with problematic conditions for some time. The Wisconsin-based retailer has seen a succession of chief executives, with Buchanan being the third in four years. During his brief tenure, the company dealt with a drop in sales, store closures, and a halved stock price since early 2024. Despite his short time at the company, Buchanan's compensation considerably surpassed the compensation received by his predecessor, Tom Kingsbury.
Stepping in as interim CEO is Michael Bender, who has been on Kohl's board since 2019 and was appointed chair in May 2024. Bender brings experience from running Eyemart Express, an optical retail company, and holding leadership roles at Walmart prior to that. In order to avoid potential conflicts while serving as interim CEO, Bender stepped away from certain board committees. A new chair will be named at a later date.
Before joining Kohl's, Buchanan led Michael's, the craft supply chain. He negotiated the sale of the company to private equity buyers during his tenure. As the holiday shopping season approached, Buchanan faced a difficult challenge, as declining sales had already been reported in March, showing a 9% drop and a 74% decrease in profits for the last quarter of 2024.
Kohl's struggles extend beyond leadership changes and negative earnings. The retailer has closed stores and reduced costs while aiming to adapt to the evolving retail landscape. As consumer choices multiply and traditional retailers like Kohl's face increased competition, the company's overarching goal remains finding a stable footing.
Despite the company's trouble, Kohl's continues to be a significant player in the American retail sector. Thousands of employees are based in the Milwaukee region alone, with a widespread presence across Wisconsin. Kohl's even made it to number 235 on the 2024 Fortune 500 list, signifying the company's substantial size, despite recent difficulties.
In the interim, the company's primary focus will be on appointing a new CEO to help steer the company back towards growth. Bender will oversee operations temporarily while the search for a permanent successor takes place. The long-term implications of this change and Kohl's future trajectory will become clearer in the coming months.
The undisclosed conflicts of interest in vendor deals, involving Kohl's former CEO Ashley Buchanan, were centered around finance and retail, as transactions were made with a vendor connected to a personal acquaintance, leading to favorable terms for the vendor. Despite the internal policy violation, Kohl's asserted that the issue did not affect the firm's business or involve any other employees, and instead highlighted the company's significant size within the American industry, with a prominent presence in Wisconsin and a ranking of 235 on the 2024 Fortune 500 list.
