Kohl’s is making headlines after abruptly firing CEO Ashley Buchanan for allegedly steering the company into questionable business deals tied to a personal relationship.
The announcement came Thursday following an internal investigation, which found Buchanan had violated company policy by pushing Kohl’s to enter into vendor transactions riddled with undisclosed conflicts of interest. Specifically, the company said Buchanan encouraged deals with a vendor founded by someone he had a personal relationship with—on terms that were unusually favorable to that vendor.
According to a filing with the SEC, the situation escalated when Buchanan also orchestrated a multi-million dollar consulting agreement involving the same individual as part of the consulting team.
Despite the scandal, Kohl’s made it clear the firing had nothing to do with the company’s financial performance or reporting, and no other employees were implicated. Buchanan, who had served as CEO since January, is now out, and the company has tapped board chairman Michael Bender to serve as interim CEO.
To avoid any conflicts, Bender is stepping down from several board committees and pausing his role as board chair—though he’ll remain on the board while temporarily leading the company. A new board chair will be named soon.
The leadership shake-up comes as Kohl’s is struggling to get back on solid ground. The retailer recently announced it’s bracing for a 4% to 4.3% drop in same-store sales for the first quarter, and expects a per-share loss of up to 24 cents. Its full earnings report is set to drop in late May.
Kohl’s has also been tightening its belt—cutting about 10% of its corporate workforce and closing 27 stores across 15 states in a bid to boost profits.
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