After Multiple Hostile Takeover Attempts, Kohl’s Is in Talks to Sell to Vitamin Shoppe Parent Company for $8 Billion

Plantation, Florida, USA - December 5, 2020:  Kohl's, an American department store retail chain is the largest department store chain in the United States with 1,162 stores across 49 states.
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It appears that retailer Kohl’s, who have been entertaining takeover bids for months, is nearing an acquisition deal worth around $8 billion.

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According to The Wall Street Journal (WSJ), the Wisconsin-based department store chain announced it has entered into a three-week exclusive negotiation period with Franchise Group, Inc., a collector of retail-based brands and service franchises, for a reported $60 per share.

According to The Hill, Kohl’s CEO Michelle Gass states that the company had received a number of offers from those looking to buy — and it was speculated that the company believed its estimated worth to be $70 per share.

Those close to the matter claim that Franchise Group and private-equity firm Sycamore Partners were in competition for the takeover, but that Franchise Group won out by offering $60 per share as opposed to Sycamore’s mid-$50 a share bid, according to the WSJ.

Kohl’s closed at $42.12 on June 6 and stock shares saw a hike of 13% after closing amid expected sale news. Its shares were marked 7.7% higher in early afternoon trading on June 7, changing hands at $45.34 each.

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Per the WSJ, many retail stores took a huge hit in sales and profits when the pandemic began, but Kohl’s wasn’t faring that well beforehand. It may be that Franchise Group will need to exert some degree of effort to get Kohl’s back on track.

The popular retailer saw its operating margin tumble to 6.1% before the pandemic (down from 11.5% in 2011), and its stock — as of January 2022 — was worth less than it had been two decades ago. As The Hill reports, Kohl’s slashed its annual earnings and sales forecast amid a disappointing first quarter of 2022. Shares of the company have fallen 17% so far this year.

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Franchise Group formerly owned Sears Outlet Stores and Liberty Tax. Its current subsidiaries include American Freight, Buddy’s Home Furnishings, The Vitamin Shoppe, Pet Supplies Plus, Sylvan Learning, Badcock Home Furniture and Wag N Wash, according to its website.

Kohl’s was founded by Polish immigrant Maxwell Kohl in Milwaukee, Wisconsin, in 1927, as a grocery store on the city’s south side. The company now operates more than 1,100 stores in 49 states (every state except Hawaii), per The Hill, making it the largest department store chain in the United States.

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About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.
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