Dive Brief:

• Macellum Advisors on Thursday said it has nominated a slate of 10 candidates to Kohl's board of directors, slamming the current board for what it called a hasty rejection of recent sale offers and adoption of a "poison pill" against a hostile takeover.

• The activist investor also expressed alarm over rumors of Kohl's leadership "flying to Seattle, Washington, where Amazon is headquartered," saying, "we hope the incumbents are not losing sight of their fiduciary duties."

• "Macellum's effort to take control of the Board is unjustified and counterproductive," Kohl's said in a statement Thursday, noting that last year it already appointed two Macellum candidates, plus another mutually agreed on, and that all board members, except its CEO, are independent. Kohl's didn't immediately respond to questions about any meeting with Amazon, nor did it address Amazon in its statement.

Dive Insight:

Despite some unique efforts and attributes, Kohl's, like other department stores, has become a target for financial firms looking to extract value from its real estate and/or e-commerce operations.

So far Kohl's has held firm. Kohl's previously acknowledged two bids – one from Acacia Research, owned by activist firm Starboard Value, for $64 per share; another for an undisclosed amount, rumored to be from Sycamore Partners – then said they are inadequate. Its board earlier this month said it rejected the bids following an independent review and promised updates on "ongoing strategic initiatives and capital allocation plans" at its March 7 shareholders meeting. For good measure, the board adopted a shareholder rights plan, also known as a "poison pill" designed to prevent a hostile takeover, which is in effect now and expires in a year. 

That has prompted Macellum to dial up the pressure. "We feel compelled to share our blunt concerns because the Board's approach to honoring its fiduciary duties leaves a lot to be desired," the firm said in an open letter to shareholders. "Notably, the poison pill adopted by the Board seems like it was structured to chill a sale process. The pill prevents a potential acquirer from bringing an offer directly to shareholders without risking substantial dilution. In fact, simply announcing an intent to commence a tender offer (as opposed to consummating one) triggers the pill."

Macellum, citing a "growing list of issues and red flags in the boardroom," called for "substantial and urgent change," including a board overhaul. Its candidates, who hail from the retail, financial, real estate and legal sectors, possess "the right mix of corporate governance acumen, consumer and retail expertise, mergers and acquisitions experience, and independent ownership perspectives," per the letter.

They include: George Brokaw, who has worked at various financial firms including in mergers and acquisitions; Macellum CEO Jonathan Duskin; former PVH Corp. executive Francis Ken Duane; former L Brands executive Pamela Edwards; Rutgers Law School vice dean and diversity and employment practices consultant Stacy Hawkins; former Macy's chief merchant and e-commerce chief Jeffrey Kantor, also previously CEO of Hecht's department stores; investment banker and B.Riley executive Perry Mandarino; former Chico's FAS executive Cynthia Murray; business consultant Kenneth Seipel, previously executive at Gap Inc. and Wet Seal, among other retailers; and Craig Young, founder and managing principal of real estate private equity firm Tidewater Capital.

Meanwhile, Macellum seemed displeased with the idea of a meeting between Amazon and Kohl's.

The e-commerce giant for years has often been floated as an ideal candidate to take over Kohl's, and to some it seems even more logical now that the two have a working relationship, with the mid-tier department store handling Amazon returns at all of its stores. And Kohl's presence at strip-style shopping centers is seen by many as an ideal location setup for many of Amazon's brick-and-mortar stores. Those include not just bookstores and a variety of grocery stores, but also an apparel store that is likely to compete directly with Kohl's.

Along with location, Kohl's offers Amazon an opportunity to grow its Prime customer base, as just 62% of Kohl's customers are Prime members, and expand in apparel, which is the bulk of Kohl's business, according to Guggenheim analysts led by Robert Drbul.

Still, while Guggenheim acknowledged strategic value for Amazon in aquiring Kohl's, Drbul called that scenario "a long shot in today's regulatory environment."