OR Kohl's Stores Face Possible New Ownership In $8B Deal

BEAVERTON, OR — Retail giant Kohl's, which has 11 locations in Oregon, is in exclusive talks to be sold to Franchise Group Inc., the owner of Vitamin Shoppe and other brands, Kohl's announced in a news release Monday.

The department store chain has been the subject of sale talks going back to last year, according to reports from CNBC and others. Just last month, the owner of JCPenney offered to buy Kohl's in a deal that would have been worth around $8.6 billion.

Kohl's Oregon locations are in Beaverton, Portland, Clackamas, Hillsboro, Albany, Medford, Wood Village, Bend, Salem, Sherwood and Springfield.

Any deal would have to be approved by the boards of directors of both companies, Kohl's said in a news release. Kohl's has more than 1,100 stores in 49 states.

Penney owners Simon Property Group and Brookfield Asset Management were not alone in expressing interest in the retailer.

Kohl's said after considering final proposals, it landed on Franchise Group, according to Kohl's.

Kohl's considered "multiple bidders" for a potential buyout, according to a Kohl's news release from May. Kohl's brought in banking giant Goldman Sachs to consider proposals from a number of potential buyers.

Kohl's sales dropped significantly in the first quarter of 2022, according to a news release from the company. The chain's share price also decreased significantly in the early months of 2022, according to The Wall Street Journal.

In January 2022, Kohl's stock was worth less than it was 20 years ago, The Wall Street Journal reported.

"The year has started out below our expectations," Kohl’s Chief Executive Officer Michelle Gass said in a news release.

A hedge fund with a stake in Kohl's encouraged the chain in December 2021 to consider a sale or a massive change to the business to bring up the stock price, CNBC reported.

The hedge fund was not alone in questioning Kohl's direction and profitability, according to CNBC. The company was urged again in January by hedge fund advisors to consider a sale.

Kohl's financial trouble follows a larger trend in the United States. The department store sector has struggled to keep up with Amazon and other growing chains like Walmart and Target, according to CNN.

Last week, Kohl's announced that they were getting a "refresh" by adding Sephora stores within 400 of their stores around the country. Kohl's said that the Sephora addition allows "Kohl’s to completely reimagine and modernize the look and feel of the store for its shoppers."

Beaverton is the only store in Oregon getting a Sephora, according to a Kohl's release.

The chain has not said how a deal with Franchise Group would affect the Sephora expansions..