That didn’t take long.
Kohl’s once again is looking for a CEO to end its yearlong decline after the struggling department store retailer fired Ashley Buchanan only three and a half months into the job.
An internal investigation found that Buchanan was steering contracts to a business owned by someone with whom he has an unspecified “personal relationship,” according to SEC documents. On Thursday, Kohl’s said Buchanan, who took the reins on Jan. 15, had directed Kohl’s to conduct business “on highly unusual terms favorable to the vendor” and enter “a multimillion-dollar consulting agreement” beneficial to that person, and did not disclose his personal relationship.
The scandal comes at a bad time for the company: Kohl’s is in the throes of a major turnaround attempt as it tries to win back shoppers in a tough retail environment. Buchanan had not had time to formulate his turnaround plan, and was still in the diagnosis phase. Now, his lightning-fast ouster means that Kohl’s has to start yet another CEO search—something that will keep a cloud of uncertainty over the company as it struggles to reverse its fortunes.
Kohl’s has reported 12 straight quarters of revenue declines with no end in sight. Its store brands have fallen flat with shoppers, and the other brands it sells can be found at many other retailers such as Amazon, Target, Dick’s Sporting Goods, and Walmart. There have been recent store closings and layoffs. Kohl’s will report first-quarter earnings at the end of May but said it expects another decline for the quarter that just ended.
The company’s next permanent CEO will need time to get acquainted with the business before formulating a turnaround plan. And all this comes at a particularly terrible time in the calendar year of any retail company: Kohl’s is making plans and placing orders for the lucrative holiday season quarter.
“Kohl’s is without a permanent captain at a time when the ship is looking far from seaworthy,” GlobalData managing director Neil Saunders wrote in a research note. “Kohl’s now needs to find someone with the requisite skills to enact a quick turnaround and get the company back onto the front foot. Given the deep-seated problems at the chain, this might be a tall order.”
For now, chairman Michael Bender, an executive who has been CEO at optical retailer Eyemart Express, and operations chief at Walmart U.S. e-commerce, will take over as interim CEO at Kohl’s. It will be up to Bender in the interim, and potentially another person down the road, to address the company’s problems. But they will do so as Kohl’s navigates shopper defections, declining consumer confidence, tariffs that threaten to make much of its merchandise more expensive, and market share gains from competitors.
To be sure, Bender is likely the right man for the job. He has been on the board since 2019 and served as chair since last May. That means continuity, and a strong handle on details about the business.
And it’s worth noting that however disruptive another CEO search might be, Wall Street didn’t seem to mind Buchanan’s departure: Kohl’s shares were up 6% in midmorning trading.
This story was originally featured on Fortune.com
