Kohl’s, a Wisconsin corporation, abruptly fired CEO Ashley Buchanan on Thursday, just four months after hiring him, citing violations of the company’s conflict-of-interest policies.
An internal investigation overseen by Kohl’s audit committee and conducted by an outside law firm found Buchanan had directed the retailer to engage in business with a vendor tied to someone he had a personal connection with—without disclosing the relationship.
According to people familiar with the situation, the individual in question was a woman with whom Buchanan had a romantic relationship. The vendor reportedly received a multimillion-dollar consulting deal with unusually favorable terms, according to the Wall Street Journal.
As a result, Buchanan was fired for cause. He will forfeit all equity awards and must repay a prorated portion of his $2.5 million signing bonus. The company also withdrew his nomination for election to the board at its May 14 shareholder meeting.
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Kohl’s, headquartered in Menomonee Falls, Wisconsin, just outside Milwaukee, appointed board chairman Michael Bender as interim CEO, effective immediately. Bender, a board member since 2019, will temporarily step down from several committee roles during his interim leadership.
Buchanan’s termination marks the third CEO exit at the retailer in as many years. He had succeeded Tom Kingsbury, who left after less than two years, following Michelle Gass’s departure to Levi’s.
Despite the leadership upheaval, Kohl’s stock rose nearly 6% to $7.09 on Thursday, buoyed in part by better-than-expected preliminary first-quarter results.
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The company now anticipates comparable sales to decline between 4% and 4.3%, better than Wall Street’s forecast of a 6.4% drop. Losses are expected to range between 20 and 24 cents per share, less than half of analysts’ projected 57-cent loss.
The stock remains down 50% for the year, continuing a decline that began in April 2022.