Kohl’s enters exclusive talks to be sold to owner of Vitamin Shoppe

Kohls Corp.

is in advanced talks to be sold in a deal that could value the department store chain at around $8 billion.

The Wisconsin company said it has entered into exclusive talks with retail holding company Franchise Group Inc.,

confirming an earlier Wall Street Journal report. The exclusivity period is set to last three weeks, the company said, adding that a deal is not guaranteed.

Franchise Group, which owns brands such as Vitamin Shoppe, had offered Kohl’s about $60 a share, the company said, confirming an earlier Journal report. He was vying for the company in competition with private equity firm Sycamore Partners, which made an offer of around $50 a share, people familiar with the matter said.

The stock closed at $42.12 on Monday and was up 13% after hours amid the news.

Shares of Kohl’s, which said it was exploring strategic options, had fallen about 15% so far this year, buffeted by market turbulence and fears of an economic slowdown, in a decline tempered by the possibility of a ‘a deal.

A few weeks ago, Kohl’s told suitors it believed the company was worth at least $70 a share, though tough retail and leveraged buyout financing conditions may have dampened its expectations. of price.

Already struggling Kohl’s was further impacted by the Covid-19 pandemic, which gnawed away at sales and wiped out profits in 2020. Sales and profits rebounded in 2021, but in January 2022 the retailer’s stock worth less than it was two decades ago.

Franchise Group mainly acquires and manages franchise companies.

Although it has a market cap of just $1.5 billion, there are ways the company could make it more affordable to buy, people familiar with the matter say, such as teaming up with investors. existing ones or by selling real estate.

Write to Cara Lombardo at [email protected]

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