Kohl's: Activist hedge fund Engine Capital is prompting Kohl's to split off its e-commerce business
07 December 2021, Mumbai:
It’s an age-old conundrum: Should companies take actions for the immediate benefit of shareholders or for the potential long-term good of the company itself?
Ideally, anything a company does should satisfy both but as we’re seeing in the new debate within the retail sector, that’s often not the case.
With the news over the weekend that activist hedge fund Engine Capital is asking Kohl’s to split off its e-commerce business into a separate entity, it marks the third retailing corporation to face this issue and there’s no reason to believe there won’t be more of this to come. Several retailers would appear to be immediately vulnerable.
Earlier this year Hudson’s Bay Co., which itself went private the year before, spun off its Saks Fifth Avenue e-commerce as part of the parent company’s efforts to create more value from its assets.
Amidst reports that it will seek to go public, the online unit is reporting sales up 80% versus a year ago and has achieved a valuation of about $2 billion, which is believed to be higher than the privately owned HBC, which also includes the Hudson’s Bay stores in addition to Saks itself and Saks Off Fifth outlet units.
Forbes (The news article has not been edited by DFU Publications staff)
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