Engine Capital pushes Kohl’s to review sale, separate e-commerce business By Reuters

(Reuters) – U.S.-based hedge fund Engine Capital LP is pushing Kohl’s Corp (NYSE:) to consider a sale of the company or separate its e-commerce division to improve its lagging stock price.

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

The New York-based hedge fund also said that Kohl’s should consider a strategic review of the whole company and even a sale to a buyer who can give a meaningful premium, adding it believes there are sponsors that would pay at least $75 per share.

Shares of Kohl’s, which did not respond to a request for comment, were up about 3% in premarket trading.

Engine Capital’s proposal comes at a time when retailers have doubled down on their online businesses following the e-commerce boom during the COVID-19 pandemic that drove people to shop online as they avoided crowds at brick-and-mortar stores.

Earlier in October, activist investor Jana Partners urged Macy’s Inc (NYSE:) to sell its digital business, following which the retailer said it was working with consulting firm AlixPartners to review its business structure.

Hudson (NYSE:)’s Bay Co-owned luxury department store chain Saks Fifth Avenue has said it would spin off its e-commerce segment, following 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. Wall Street Journal first reported the news on Sunday.