It didn’t take long.
Kohl’s is looking for once again a CEO to end his decrease by one year after the retailer of department stores in difficulty dismissed Ashley Buchanan only three and a half months after work.
An internal survey revealed that Buchanan directed contracts to a company belonging to a person with whom he has an unpertified “personal relationship”, According to the dry documents. On Thursday, Kohl’s said that Buchanan, who took the reins on January 15, had ordered Kohl to carry out business “on very unusual conditions favorable to the seller” and to conclude “a several million dollar consultation agreement” beneficial for this person, and did not disclose his personal relationship.
The scandal arrives at a bad time for the company: Kohl’s is plagued by a major recovery attempt when it is trying to win back buyers in a difficult retail environment. Buchanan had not had time to formulate his recovery plan and was still in the diagnostic phase. Now, her rapid eviction means that Kohl must start another CEO search – something that will keep a cloud of uncertainty about the company when it fights to reverse its fortune.
Kohl’s reported 12 consecutive quarters of endless income drops. Its store brands fell flat with buyers, and other brands it sells can be found at many other retailers such as Amazon, Target, Dick’s Sporting Goods and Walmart. There have been recent closings and layoffs. Kohl’s will publish results in the first quarter at the end of May, but said that he expects another drop in the quarter that has just finished.
The next permanent CEO of the company will need time to familiarize itself with the company before formulating a recovery plan. And all this arrives at a particularly terrible moment of the calendar year of any retail company: Kohl’s makes plans and plays orders for the quarter of the lucrative holiday season.
“Kohl’s is without permanent captain at a time when the ship is far from Seaworthy,” wrote Neil Saunders, Managing Director of Globaldata, in a research note. “Kohl now needs to find someone with the skills required to implement a quick turnaround and bring the business back to the front foot. Given the problems deeply anchored to the chain, this could be a major challenge.”
For the moment, President Michael Bender, a framework that has been CEO at the Optique Eyyart Express retailer, and the operations chief of Walmart US E-commerce, will take over as an acting CEO at Kohl’s. It will be up to Bender in the meantime, and potentially another person at the bottom of the road, to solve the problems of the company. But they will then do so that Kohl is sailing on the defections of buyers, the decline in consumer confidence, prices that threaten to make a large part of its goods more expensive and gains in competitors’ market share.
Certainly Bender is probably the right man for work. He has been on the board of directors since 2019 and has been president since last May. This means continuity and solid conduct on business details.
And it should be noted that, whatever the disturbance of another search for the CEO, Wall Street did not seem to worry about the departure of Buchanan: Kohl’s shares increased by 6% in the mid -morning trading.
This story was initially presented on Fortune.com
