Kohl’s may have a new owner shortly. Late Monday, (KSS) said that it has entered into a three-week exclusive negotiating period with Franchise Group (FRG), a holding company that owns The Vitamin Shoppe and other retail brands, for a prospective sale.
Kohl’s has been suggested for purchase by Franchise Group for $60 per share. On Monday, shares ended at $42.12 and jumped 10% in early trading Tuesday as a result of the announcement. According to The Wall Street Journal, the sale would value at nearly $8 billion, roughly five times what it was worth last week. Kohl’s stated that there were no guarantees that an agreement would be achieved during the negotiation phase.
However, the whole department store sector has been in decline for years due to Amazon’s rising big-box chains such as Walmart (WMT) and Target (TGT), as well as inexpensive apparel retailers such as TJMaxx. In recent years, retailers such as Sears, JCPenney, Neiman Marcus, Barney’s, and others have declared bankruptcy.Discount players at the bottom have undercut department shops like Kohl’s on price, while luxury businesses at the top have undercut them on status.