Yahoo Finance

Key Takeaways

• Kohl's on Thursday said it had terminated CEO Ashley Buchanan "for cause" and appointed board chair Michael Bender as interim CEO.

• An investigation found Buchanan allegedly had Kohl's enter a multi-million agreement with a consulting group that included a personal contact, the company said in an SEC filing.

• Shares of Kohl's were up more than 8% in trading Thursday.

Kohl's fired CEO Ashley Buchanan after he allegedly directed the company to enter a multi-million dollar agreement with a group that included a personal contact, the company said.

An investigation by outside counsel concluded that Buchanan violated company policies, Kohl's (KSS) said in a filing with the Securities and Exchange Commission. He allegedly directed Kohl’s to work with a vendor founded by a personal contact under “highly unusual” and “favorable” terms, the filing said. It claimed Buchanan also had Kohl’s enter a multi-million dollar agreement with a consulting team that included this individual.

Buchanan, who took on the role earlier this year, allegedly didn’t disclose his ties to this person, who The Wall Street Journal reported was a woman with whom Buchanan has had a romantic relationship. Investopedia could not immediately reach Buchanan for comment.

Kohl's stock was recently up more than 8%. Its shares have lost roughly half their value this year, and the struggling retailer has cycled through leaders in recent years.

The board viewed Buchanan's behavior as grounds for removal, the company said in a press release Thursday. Kohl’s said the termination was "unrelated to the company's performance, financial reporting, [and] results of operations,” in a press release.

Kohl's has appointed board chair Michael Bender interim CEO and will hire a "leading search firm" to help identify a permanent leader, the company said. Bender will remain on the board, but no longer hold the chair role.

Buchanan took the helm in January from Tom Kingsbury, who stepped down after less than two years. Kohl’s has said it alienated loyal shoppers by overlooking products they love while going after a broader audience with new products. The retailer has also said it needs to shore up its reputation for offering value.

“Kohl’s has a strong foundation of more than 1,100 conveniently located stores nationwide, serving over 60 million customers," Bender said in a press release. "We will continue to build on this foundation as we enhance the value we deliver to our customers and set the stage for meaningful operational and financial progress.”