{"id":1535936,"date":"2022-07-02T06:20:15","date_gmt":"2022-07-02T10:20:15","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1535936"},"modified":"2022-07-02T06:20:17","modified_gmt":"2022-07-02T10:20:17","slug":"kohls-may-not-be-selling-itself-after-all","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/kohls-may-not-be-selling-itself-after-all\/","title":{"rendered":"Kohl&#039;s May Not Be Selling Itself After All"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fkohls-may-not-be-selling-itself-after-all%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1535936&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"PageBuilder-col-full PageBuilder-col PageBuilder-article\"><\/div>\n<div class=\"PageBuilder-col-full PageBuilder-col PageBuilder-article\">\n<\/div>\n<div class=\"PageBuilder-col-9 PageBuilder-col PageBuilder-article\">\n<div class=\"RenderKeyPoints-keyPoints\" id=\"RegularArticle-KeyPoints-4\" data-test=\"keyPoints-1\" data-analytics=\"RegularArticle-keyPoints-4-1\">\n<div class=\"RenderKeyPoints-wrapper\">\n<div class=\"RenderKeyPoints-list\">\n<div>\n<div class=\"group\">\n<ul>\n<li>Kohl&#8217;s might not be selling its business after all. But it&#8217;s now looking to sell some of its real estate.<\/li>\n<li>This reverses a prior stance that the retailer had against so-called sale-leaseback transactions.<\/li>\n<li>Kohl&#8217;s for months has been pressured by activist firms including Macellum Advisors to consider a sale of the company, in large part to unlock the value tied up in Kohl&#8217;s real estate.<\/li>\n<li>&#8220;It&#8217;s no secret that Kohl&#8217;s has a very big asset on the balance sheet: Real estate,&#8221; Kohl&#8217;s board chair Peter Boneparth told CNBC.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"ArticleBody-articleBody\" id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\">\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-107072211\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<div class=\"InlineImage-imageEmbedCaption\">People walk near a Kohl&#8217;s department store entranceway on June 07, 2022 in Doral, Florida.<\/div>\n<div class=\"InlineImage-imageEmbedCredit\">Joe Raedle | Getty Images<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p><a href=\"https:\/\/www.cnbc.com\/quotes\/KSS\" target=\"_blank\" rel=\"noopener\">Kohl&#8217;s<\/a> might not be selling its business after all. But it&#8217;s now looking to sell some of its real estate, reversing its <a href=\"https:\/\/www.cnbc.com\/2021\/03\/02\/kohls-says-it-has-no-plans-to-sell-more-real-estate-and-lease-it-back.html\">prior stance<\/a>.<\/p>\n<p>The retailer on Friday announced it terminated deal talks with The Vitamin Shoppe owner <a href=\"https:\/\/www.cnbc.com\/quotes\/FRG\" target=\"_blank\" rel=\"noopener\">Franchise Group<\/a>, confirming CNBC&#8217;s reporting from Thursday evening. Instead, Kohl&#8217;s said, it will continue to operate as a standalone public company.<\/p>\n<p>Kohl&#8217;s for months has been pressured by activist firms including Macellum Advisors to consider a sale of the company, in large part to unlock the value tied up in Kohl&#8217;s real estate.<\/p>\n<\/div>\n<div class=\"group\">\n<p>Macellum has argued that Kohl&#8217;s should sell some of its real estate and lease it back as a way to unlock capital, particularly during tough times. Kohl&#8217;s, however, <a href=\"https:\/\/www.cnbc.com\/2021\/03\/02\/kohls-says-it-has-no-plans-to-sell-more-real-estate-and-lease-it-back.html\">has been resistant to so-called sale leaseback transactions, at least at such a large scale<\/a>.<\/p>\n<p>The company did complete a small sale-leaseback deal earlier on in the Covid pandemic, according to Peter Boneparth, chair of Kohl&#8217;s board. It recognized a gain of $127 million by selling and leasing back its San Bernardino e-commerce fulfillment and distribution centers.<\/p>\n<p>On Friday, though, Kohl&#8217;s explicitly noted in its press release that its board is currently reevaluating ways that the retailer can monetize its real estate. Franchise Group had been planning to finance a portion of its Kohl&#8217;s acquisition by selling a chunk of Kohl&#8217;s real estate to another party and then leasing it back. This likely gave Kohl&#8217;s an idea of what sort of value it could fetch for its owned bricks-and-mortar stores and distribution centers.<\/p>\n<p>&#8220;Now you&#8217;ve got an environment where financing has changed so much that it may in fact be more attractive to use real estate as a monetization vehicle,&#8221; Boneparth told CNBC in a phone interview.<\/p>\n<p>&#8220;When you combine that with what we think the levels of the stock are, it becomes a much different exercise than it was in a previous financing environment,&#8221; he explained. &#8220;It&#8217;s no secret that Kohl&#8217;s has a very big asset on the balance sheet: Real estate.&#8221;<\/p>\n<p>As of Jan. 29, Kohl&#8217;s owned 410 locations, leased another 517 and operated ground leases on 238 of its shops. All of its owned real estate was valued at a little more than $8 billion at that time, an annual filing shows.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">Pros and cons<\/h2>\n<div class=\"group\">\n<p>Proponents of sale-leaseback deals argue it&#8217;s a convenient way for companies to come up with funds to put toward future growth, so long as there is a buyer for the real estate. But it also leaves the seller with having to meet lease obligations since they would be renting the property they just sold.<\/p>\n<p>Those leases could become much more difficult to break and rents can fluctuate across markets. Kohl&#8217;s said in its annual filing that a typical store lease has an initial term of 20 to 25 years, with four to eight five-year renewal options.<\/p>\n<p>In 2020, Big Lots reached a deal with private-equity real estate firm Oak Street to\u00a0<a href=\"https:\/\/www.prnewswire.com\/news-releases\/big-lots-completes-725-million-saleleaseback-transactions-301077228.html\" target=\"_blank\" rel=\"noopener\">raise $725 million<\/a>\u00a0from selling four company-owned distribution centers and leasing them back. It gave the big-box retailer additional liquidity during near the onset of the\u00a0<a href=\"https:\/\/www.cnbc.com\/coronavirus\/\">Covid-19 pandemic<\/a>.<\/p>\n<p>Also in 2020,\u00a0<a href=\"https:\/\/www.cnbc.com\/quotes\/BBBY\">Bed Bath &#038; Beyond<\/a>\u00a0completed<a href=\"https:\/\/www.cnbc.com\/2020\/01\/06\/bed-bath-beyond-shares-jump-on-real-estate-deal-for-250-million.html\">\u00a0a sale-leaseback transaction<\/a>\u00a0with Oak Street, in which it sold about 2.1 million square feet of commercial real estate and netted $250 million in proceeds. Mark Tritton, the Bed Bath CEO at the time, touted the deal as a move to raise capital to invest back in the business. Now, though, Bed Bath is facing another cash crunch as its sales slump and Tritton was ousted from his role earlier this week.<\/p>\n<p><a href=\"https:\/\/www.cnbc.com\/2022\/06\/06\/kohls-enters-exclusive-sale-talks-with-franchise-group-.html\">Oak Street had been planning to offer financing<\/a> to Franchise Group in a Kohl&#8217;s deal, CNBC previously reported, according to a person familiar with the discussions. A representative from Oak Street didn&#8217;t respond to CNBC&#8217;s request for comment.<\/p>\n<p>Kohl&#8217;s on Friday reaffirmed its plan to conduct a $500 million accelerated stock buyback later this year. It reduced its revenue guidance for the fiscal second quarter, citing a recent softening in consumer demand amid decades-high inflation.<\/p>\n<p>&#8220;Clearly the the consumer is under even more pressure today,&#8221; Kohl&#8217;s CEO Michelle Gass told CNBC in a phone interview. &#8220;We&#8217;re not immune to that &#8230; but Kohl&#8217;s stands for value. And at times like this it&#8217;s more important than ever to amplify that message.&#8221;<\/p>\n<p>She added that Kohl&#8217;s partnerships with <a href=\"https:\/\/www.cnbc.com\/quotes\/AMZN\" target=\"_blank\" rel=\"noopener\">Amazon<\/a> and Sephora remain in place and part of the company&#8217;s longer-term strategy to win over new customers.<\/p>\n<p>&#8220;The conclusion of the board process was absolutely the right answer,&#8221; she said.<\/p>\n<p>Kohl&#8217;s shares ended Friday trading down nearly 20% and at one point touched a new 52-week low of $27.65. Shares of Franchise Group ended the day down 7.5% and also touched a new 52-week low of $31.67 during trading.<\/p>\n<p>Macellum didn&#8217;t respond to CNBC&#8217;s request for comment.<\/p>\n<\/div>\n<\/div>\n<div class=\"WatchLiveRightRail-inline WatchLiveRightRail-container\" id=\"RegularArticle-WatchLiveRightRail-7\" data-test=\"watchLiveRightRail-4\" data-analytics=\"RegularArticle-watchLiveRightRail-7-4\">\n<div class=\"WatchLiveRightRail-contents\"><a href=\"https:\/\/www.cnbc.com\/live-tv\/\" class=\"WatchLiveRightRail-wlButton\">WATCH LIVE<img decoding=\"async\" src=\"denied:data:image\/svg+xml;base64,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\" class=\"WatchLiveRightRail-logo\" alt=\"logo\" \/><\/a><a href=\"https:\/\/www.cnbc.com\/live-tv\/\" class=\"WatchLiveRightRail-wlButtonMobile\">WATCH IN THE APP<\/a><\/div>\n<\/div>\n<\/div>\n<div class=\"PageBuilder-col-9 PageBuilder-col PageBuilder-article\"><\/div>\n<div class=\"PageBuilder-col-12 PageBuilder-col PageBuilder-article\">\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Kohl&#8217;s might not be selling its business after all. But it&#8217;s now looking to sell some of its real estate. This reverses<\/p>\n","protected":false},"author":1,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1535936","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1535936","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1535936"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1535936\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1535936"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1535936"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1535936"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}