Making sense of a possible Kohl’s sale

A bevy of suitors are competing for Kohl’s hand. This week, reports surfaced that Sycamore Partners and Hudson’s Bay are each potentially prepping takeover bids for Kohl’s that could value the company above $9 billion. And no, they won’t be paying in Kohl’s Cash.

• Activist investor Engine Capital urged the department store’s board to consider a sale back in December, with Macellum Advisors soon following.

Kohl’s said in a filing earlier this month that its advisors were contacted by 20+ potential buyers. (After it already turned down offers.) Still, the retailer isn’t ruling out remaining independent, and will make its decision based on which option will provide the most shareholder value, Kohl’s senior VP of corporate communications, Jen Johnson, told Retail Brew.

Good for who? There could be benefits to a Kohl’s takeover for a retailer like Hudson’s Bay—a new market category, access to shop-in-shops—according to Erin Schmidt, a senior analyst at Coresight Research. But for Kohl’s, the biggest boost would be no longer bearing the “expense and scrutiny of being a public company,” she said. Schmidt also cited HBC’s experience as a department-store operator as a plus.

But, but, but: Neil Saunders, managing director of GlobalData’s retail division, seemed more skeptical. Hudson’s Bay has a track record that includes ventures like Lord & Taylor ending in failure, he pointed out.

• Saunders also mentioned the possibility of HBC replicating Saks’s separation of online and stores for Kohl’s, which he deemed a poor long-term strategy.

“Kohl’s is attracting a lot of interest, but most of it is not healthy interest,” Saunders wrote to us. “There are groups that want to split Kohl’s up, spinning off real estate or online, to extract short-term gains at the expense of the long-term health of the company.”—JG