Kohl's (KSS) is considering the sale of its business, but it ain't gonna be cheap.
That's the message the struggling retailer sent the world Friday when it adopted a "poison pill" measure to scuttle any potential hostile takeover bids.
The company's board of directors reviewed "current expressions of interest" from groups looking to purchase it and decided that the offers on the table were not enough.
"The valuations indicated ... do not adequately reflect the company's value in light of its future growth and cash flow generation," the company said in a statement Friday.
Last month, Bloomberg reported that Kohl’s has been approached by private equity firm Sycamore Partners about a potential takeover. It is unclear how much Sycamore is willing to pay for the company.
Acacia Research, which has less than a 5% stake in Kohl’s, offered $64 per share for the company, Bloomberg reported.
Kohl's was trading up 2% to $59.75 Friday.
Kohl's isn't closing the door on a potential sale, however, and its board has designated its finance committee to lead an ongoing review of any expression of interest.
Image source: Shutterstock.
Amazon Could Use a Physical Footprint
That's where Amazon comes into the picture.
Thus far, the mega retailer has has not expressed any public interest in purchasing Kohl's, but the tie-up could make a lot of sense for both companies.
For Kohl's, Amazon has the deepest pockets of any of its potential suitors. The company has about $80 billion in cash on hand.
For Amazon, the company is thick in the retail scene now, having launched Amazon Style last month, the online retail giant's first brick and mortar clothing store.
In January the company also revealed plans to expand its cashier-less Amazon Go stores to the suburbs, with the first one set to open in Mill Creek, Wa. Amazon also plans to open a second Go store in the Los Angeles area, the company said.
Amazon also has dozens of owned-and-operated clothing brands that it has struggled to gain traction with. Being able to showcase those lines -- and have customers try items on -- could both kickstart those brands and help Kohl's refresh its offering.
Kohl's Could Help Fulfillment Needs
"The benefit of owning Kohl’s would be its store count. And Amazon could use them as fulfillment centers," Morningstar analyst David Swartz told TheStreet in a recent interview.
The two companies already have a partnership, which started in September 2017.
As of 2021, Kohl's now accepts Amazon returns at nearly 1,200 locations. The company has credited Amazon with helping push foot traffic to its stores.
A Kohl's deal could also help the company get orders into the hands of customers more quickly.
"One of Amazon’s biggest problems has been the last mile of delivery," Swartz, an equity analyst in the consumer sector research group, said. "Owning Kohl’s could bring them closer to customers, especially in smaller cities that may not have a fulfillment center close."
