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After Kohl’s And Genesco, Could There Be An Uptick In Retail Activist Investor Battles?
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As seen in Footwear News
Kohl’s and Genesco have both become targets of shareholder activism over the past couple months — and experts predict that the number of proxy campaigns across the sector could increase in the months ahead.
Apparel and footwear companies are facing a vastly different retail environment as a result of the global health crisis. Now, as the economy continues to reopen and markets appear to be in recovery mode, experts say activist investor groups might be convinced that now is the time to strike.
“There are three key operating factors that drive shareholder activism: One, declining profitability and/or rising costs; two, plateauing or declining growth; and three, underperforming non-core assets — brand and/or real estate,” explained Kristin Kohler Burrows, senior director at management consultancy Alvarez & Marsal’s Consumer and Retail Group and a former top executive at Keds and Converse. “COVID accelerated the exposure of many underlying issues that were already there pre-pandemic — being over-stored, [having] too big of store footprints and, in some cases, assortment challenges given shifting customer preferences.”