Kohl's Corporation has made headlines with the abrupt termination of its CEO, Ashley Buchanan, after just over 100 days in the role. The decision, announced on May 1, 2025, follows an investigation that uncovered serious violations of the company's conflict-of-interest policies. The board's investigation revealed that Buchanan had directed the retailer to engage in vendor transactions that involved undisclosed relationships, raising significant ethical concerns.
Michael Bender, who has served as the board chair since May 2024 and a director since July 2019, has been appointed as the interim CEO effective immediately. The board's decision to terminate Buchanan was not related to the company’s performance or financial results, but rather stemmed from his failure to disclose a personal relationship with a vendor that significantly influenced business dealings.
The investigation determined that Buchanan had pushed for highly unusual terms in business transactions with a vendor founded by Chandra Holt, a former executive at Bed Bath & Beyond. According to the findings, not only did Buchanan neglect to disclose his personal relationship with Holt, but he also caused Kohl’s to enter into a multimillion-dollar consulting agreement that included her as part of the consulting team. This breach of ethics ultimately led to his dismissal.
In a statement released by Kohl's, the company emphasized that Buchanan's termination was unrelated to its overall performance, financial reporting, or operations. This is noteworthy given that Kohl's has been grappling with sluggish sales and increased competition from retail giants like Walmart and Amazon. The company reported a decline in comparable sales, expected to fall between 4% and 4.3% for the first quarter of 2025, a stark contrast to analysts' expectations of a 6.34% decrease.
Buchanan, who previously served as CEO of the Michaels Companies, was appointed to lead Kohl's in January 2025 with the aim of revitalizing the struggling retailer. However, his tenure was marred by immediate challenges, including layoffs and store closures as part of an effort to improve profitability. His firing marks the third CEO change for Kohl's in just three years, a period characterized by instability at the executive level.
Bender, the new interim CEO, expressed his commitment to guiding the company through this difficult period. He stated, "I am honored to assume the role of Interim CEO at this important time for the Company. Working with our talented leadership team, Board, and thousands of associates, I am committed to continuing the execution of our strategic framework to grow shareholder value."
Despite the turmoil, Kohl's shares saw a slight increase of nearly 9% in late morning trading on the day of the announcement, reflecting a positive market reaction to the leadership change. Investors appear to be cautiously optimistic about the potential for a new direction under Bender's leadership, given his extensive experience in the retail sector.
The board has initiated a search for a permanent CEO and plans to retain a leading search firm to assist in this process. John Schlifske, chair of the Nominating and ESG Committee, expressed confidence in Bender's ability to steer the company, citing his over three decades of experience in retail and consumer goods.
As the dust settles from this significant leadership change, Kohl's is left to navigate an uncertain retail landscape. The company has been focusing on operational excellence and efficiency to improve its long-term financial health and profitability. However, analysts caution that the road ahead will be challenging, especially considering the ongoing operational challenges and the need for a robust turnaround strategy.
In the wake of Buchanan's departure, Kohl's will need to reassure stakeholders and customers alike. The retailer has a strong foundation with over 1,100 stores nationwide and serves more than 60 million customers. However, it remains to be seen how effectively the company can stabilize its market position and restore consumer confidence.
As Kohl's prepares to announce its first-quarter earnings results on May 29, 2025, all eyes will be on the company's performance metrics. The preliminary expectations indicate a loss per share in the range of 20 to 24 cents, which is better than analysts' earlier estimates of a 54-cent loss.
In conclusion, the firing of Ashley Buchanan serves as a stark reminder of the importance of ethical leadership in corporate governance. As Kohl's looks to the future under Michael Bender's interim leadership, the company must not only address immediate operational challenges but also rebuild trust with its customers and investors.
