Hedge fund Engine Capital calls for sale of Kohls

Dec 6 Reuters -- U.S. based hedge fund Engine Capital LP is pushing Kohl's Corp to consider a sale of the company or separate its e-commerce division to improve its stock price.

Engine Capital, which owns a roughly 1% stake in Kohl's, said on Monday that the department store has underperformed the S&P 500 as well as other retailers in recent years.

The New York-based hedge fund believes that sponsors that would pay $75 per share should consider a strategic review of the whole company, and even a sale to a buyer who can give a meaningful premium.

The shares of Kohl's, which didn't respond to a request for comment, were up about 3% in premarket trading.

Engine Capital proposed a new online business plan after the COVID 19 epidemic, which drove people to shop online as they avoided crowds at brick and mortar stores.

In October, activist investor Jana Partners urged Macy's Inc to sell its digital business, following which the retailer said it was working with consulting firm AlixPartners to review its business structure.

Hudson's Bay Co-owned luxury department store chain Saks Fifth Avenue has said it will disband its e-commerce segment after a $500 million investment from private equity firm Insight Partners in the online business.

Engine Capital said Kohl's e-commerce business alone could be worth $12.4 billion or more. The Wall Street Journal first reported the news on Sunday.