Kohl’s announced on Thursday that it fired CEO Ashley Buchanan after an investigation found he violated company policies.
The retailer said its board terminated Buchanan, who became chief executive in January, after the investigation “determined Mr. Buchanan violated company policies by directing the Company to engage in vendor transactions that involved undisclosed conflicts of interest.”
The investigation “found Mr. Buchanan had directed the Company conduct business with a vendor founded by an individual with whom Mr. Buchanan has a personal relationship on highly unusual terms favorable to the vendor and that he also caused the Company to enter into a multi-million dollar consulting agreement wherein the same individual was a part of the consulting team,” the retailer said in a Securities and Exchange Commission (SEC) filing.
KOHL’S CUTS 10% OF CORPORATE WORKFORCE TO IMPROVE PROFITABILITY
His termination did not have anything to do with the company’s “performance, financial reporting, results of operations,” nor did it involve any other employees, Kohl’s said.
Kohl’s is slated to release its first-quarter financial results in late May.
The company on Thursday preliminarily said it anticipates a 4% to 4.3% drop in comparable sales for the first quarter. Its diluted loss per share, meanwhile, is expected to be 20-24 cents, according to the retailer.
As part of efforts to boost its profitability, the company has shuttered some stores and trimmed its corporate workforce in recent months.
Outside counsel overseen by the board’s audit committee conducted the probe into Buchanan, Kohl’s said.
KOHL’S IS CLOSING 27 STORES IN 15 STATES. HERE’S WHERE THEY’RE LOCATED
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| KSS | KOHL’S CORP. | 7.33 | +0.62 | +9.25% |
The company selected board Chair Michael Bender to run the retailer on an interim basis as it begins its search for a new permanent CEO.
Bender will stop serving on some board committees and not be board chair while interim CEO, but will still keep his board seat, Kohl’s said. He has been a board member since July 2019.
A new chair will be unveiled “in due course,” Kohl’s said.
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