Kohl's ends sale talks with Franchise Group, lowers outlook

7/2/2022 2:44:00 AM

This decision from Kohl's comes as its stock price slumps and its sales decline.

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Kohl’s is terminating talks to sell its business to The Vitamin Shoppe owner Franchise Group. Read the full story from laurenthomas here:

This decision from Kohl's comes as its stock price slumps and its sales decline.

Franchise GroupKohl's shares ended Friday trading down nearly 20% and at one point touched a new 52-week low of $27.65., which it considered too low. The stock closed Friday at $28.68.Walmart"Given the environment and market volatility, the board determined that it simply was not prudent to continue pursuing a deal," Boneparth added.

Financing headachesearlier this week scrapped its plan to sell its U.K. pharmacy chain, Boots, saying no third party was able to make an adequate offer due to turmoil in the global financial markets.for Kohl's to closer to $50 per share from about $60, CNBC reported last week, citing a person familiar with the matter. The shift in thinking came as the outlook for the retail industry grew increasingly grim, the person said, as fears of a recession mounted.

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Kohl's Terminates Sale Talks With Vitamin Shoppe Owner Franchise Group, Sources SayThis decision from Kohl’s comes as its stock price slumps and its sales decline.

Kohl's takes down the 'for sale' signKohl's is no longer for sale.

Kohl's sale falls apart in shaky retail environmentThe potential sale of the Kohl's department store chain has fallen apart in a shaky retail environment of rising inflation and consumer anxiety. Kohl's entered exclusive talks early this month with Franchise Group, the owner of Vitamin Shop and other retail outlets, for a deal potentially worth about $8 billion. 'Given the environment and market volatility, the Board determined that it simply was not prudent to continue pursuing a deal,' said Kohl's Chairman Pete Boneparth.

Breakingviews - Kohl’s goes back on the shelfKohl’s is going it alone . The U.S. retailer said on Friday it had ended talks over a takeover by Franchise Group after the bidder revised its offer down and didn’t come up with “definitive financing arrangements.” The market’s reaction gives a hint at the lonely road ahead.

Kohl's sale falls apart in shaky retail environmentThe potential sale of the Kohl's department store chain has fallen apart in a shaky retail environment of rising inflation and consumer anxiety. Please take some time to listen to this Christian EDM (Electronic Dance Music) This is some high-energy street dancing!!! The official Jesus Party music video by SkerritBwoy on YOUTUBE! LIKE, SHARE, AND SUBSCRIBE! Thank YOU!

Kohl's sale falls apart in shaky retail environmentThe potential sale of the Kohl's department store chain has fallen apart in a shaky retail environment of rising inflation and consumer anxiety.

Kohl's announced Friday that it is terminating talks to sell its business, saying that the retail environment has significantly deteriorated since the beginning of its bidding process.proposed a bid of $60 per share to acquire Kohl's at a roughly $8 billion valuation.New York (CNN Business) The department store announced Friday that it has ended its strategic review process and will no longer consider selling itself to Franchise Group (FRG), a holding company that owns The Vitamin Shoppe and other retail brands.Read full article FILE - In this Feb.

The Kohl's announcement confirmed CNBC's report late Thursday that Kohl's no longer planned to sell its business to The Vitamin Shoppe owner Franchise Group . Kohl's also cut its outlook for the fiscal second quarter, citing softer consumer spending amid decades-high inflation. That ran its course this past weekend. It now sees sales down high-single digits, compared with a prior forecast of down low-single digits relative to last year. He added that the company"remains open to all opportunities to maximize value for shareholders. Kohl's shares ended Friday trading down nearly 20% and at one point touched a new 52-week low of $27.69.65. (AP) — The potential sale of the Kohl's department store chain has fallen apart in a shaky retail environment of rising inflation and consumer anxiety.

The retailer's decision to end deal talks comes as its stock price slumps and its sales decline.33. Friday's news sent Kohl's stock sinking more than 15% in premarket trading. Kohl's has faced months of pressure from activist investors to pursue a sale and shake up the business with a new slate of board directors. Earlier this year, it rejected a different firm's buyout offer of $64 a share , which it considered too low.6 billion, its shares down about 28% so far this year. The stock closed Friday at $28."They entertained Franchise Group as it was the least worst option and would have kept the company intact and some of the current management in place, but they will not likely mourn the termination of talks.68. Activist firm Macellum Advisors has been pushing for Kohl's to consider a sale or consider other strategic alternatives. “Kohl’s decision to terminate acquisition talks with Franchise Group comes as no great surprise,” said Neil Saunders, managing director of GlobalData.

Kohl's on Friday said rocky conditions in the retail industry and the overall economy effectively doomed the deal with Franchise Group, after it engaged with more than 25 different parties with help from bankers at Goldman Sachs. In a separate 8-K filing with the Securities and Exchange Commission, Kohl's cited recent disappointing financial reports from major retail companies including Walmart that "raised concerns about retail and consumer industry trends, which were followed by significant declines in retailer stock prices. The company will report quarterly earnings on August 18." "Despite a concerted effort on both sides, the current financing and retail environment created significant obstacles to reaching an acceptable and fully executable agreement," said Peter Boneparth, chair of Kohl's board, in a news release. "Given the environment and market volatility, the board determined that it simply was not prudent to continue pursuing a deal," Boneparth added. While Kohl's board decided that it is in the best interest of shareholders for management to continue to operate on a standalone basis, the retailer also said Friday that its board "nonetheless remains open to any opportunities to maximize shareholder value. Companies such as Sears (SHLDQ), JCPenney, Neiman Marcus and Barney's have filed for bankruptcy in recent years. U.

" Franchise Group also confirmed Friday morning that its negotiations to acquire Kohl's were terminated. The company, run by CEO Brian Kahn, said that it will continue to evaluate other internal and external deal opportunities. Financing headaches Financing such a massive deal has become more difficult due to volatility in the stock market and broader economy, as the Federal Reserve jacks up interest rates to counter surging inflation.. Walgreens Boots Alliance earlier this week scrapped its plan to sell its U.K.

pharmacy chain, Boots, saying no third party was able to make an adequate offer due to turmoil in the global financial markets. Potential suitors for Kohl's, which ultimately ended up not providing bids, expressed interest in the retailer's real estate, according to the SEC filing. But one party said that an investment in traditional retail would be "difficult." Another said that a take-private deal would require insights that the public market didn't have. Franchise Group had been weighing lowering its bid for Kohl's to closer to $50 per share from about $60, CNBC reported last week, citing a person familiar with the matter.

The shift in thinking came as the outlook for the retail industry grew increasingly grim, the person said, as fears of a recession mounted. Franchise Group in early June proposed a bid of $60 per share to acquire Kohl's at a roughly $8 billion valuation. The two companies then entered an exclusive three-week window during which they could firm up any due diligence and final financing arrangements. That ran its course this past weekend. Kohl's confirmed Friday that Franchise Group did submit a revised proposal at $53 per share, albeit "without definitive financing arrangements to consummate a transaction.

" Kohl's said the parties then faced "significant obstacles" in reaching a fully executable agreement. Kohl's said, however, that it will still evaluate opportunities to monetize portions of its real estate portfolio. CNBC previously reported that Franchise Group was planning to finance its acquisition of Kohl's, in part, by selling a portion of the retailer's real estate to another party and then leasing it back. Kohl's ended Friday trading with a market valuation of roughly $3.7 billion, its shares down more than 40% so far this year.

Shares of Franchise Group ended the day down 7.5% and also touched a new 52-week low of $31.67 during trading. Activist pressure Activist firm Macellum Advisors has been pushing for Kohl's to consider a sale or consider other strategic alternatives .