In a stunning upheaval at Kohl’s, CEO Ashley Buchanan was terminated “for cause” after under five months on the job when an outside counsel’s probe revealed he directed the retailer to engage in vendor transactions with undisclosed conflicts—most notably involving Chandra Holt, a former Walmart colleague and romantic partner. The board’s decision underscores how Holt’s role as a consultant and founder of coffee brand Incredibrew became central to allegations that Buchanan violated Kohl’s code of ethics.
How Chandra Holt Became Linked to Kohl’s Controversy
Kohl’s announced that Buchanan’s dismissal was unrelated to its financial performance—sales had slipped 4.3% in the latest quarter—but rather stemmed from his “inappropriate business decision” to steer a multimillion-dollar consulting contract toward Holt’s firm. According to a Wall Street Journal report and Kohl’s regulatory filing:
- Romantic Relationship Undisclosed: Buchanan failed to disclose his personal ties to Holt when he authorized her inclusion on the consulting team.
- Vendor Transactions Directed: He instructed Kohl’s to contract with Holt’s consultancy, sparking conflicts of interest that contravened company policy.
- Code of Ethics Violations: Two separate transactions with Holt’s firm were deemed cause for termination, leading to the forfeiture of Buchanan’s equity awards and a prorated reimbursement of his $2.5 million signing bonus.
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Immediate Fallout and Interim Leadership
The abrupt ousting sent Kohl’s (KSS) shares surging as much as 8% in trading, reflecting relief that the board addressed the ethical breach swiftly. Chairman Michael Bender has stepped in as interim CEO, tasked with steadying the ship amid a challenging retail landscape. Neil Saunders, managing director of GlobalData Retail, called Buchanan’s departure “a distraction that the company does not need and can ill afford,” questioning the due diligence that led to his appointment.
Meanwhile, Kohl’s continues to navigate broader headwinds:
- Sales Decline: A 4.3% drop in the most recent quarter, with further losses anticipated this spring.
- Store Closures: The retailer plans to shutter 27 locations, leaving approximately 1,100 outlets.
- Sector Turmoil: Changing consumer habits, stiff online competition, inflationary pressures, and reduced spending have plagued department stores nationwide.
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A Cautionary Tale for Corporate Governance
Buchanan’s rapid rise—from leading arts and crafts chain Michaels to Kohl’s CEO in January—ended abruptly. After decisions involving Chandra Holt spotlighted the importance of transparent governance. Kohl’s board emphasized the termination was “unrelated to the company’s performance, financial reporting, [or] results of operations.” Yet the episode raises lingering questions about vetting top executives and preventing similar ethical lapses.
With Michael Bender at the helm, Kohl’s must now regain shopper confidence. And refocus on its turnaround strategy without the cloud of scandal. As the search for a permanent CEO begins, investors and consumers alike will watch how Kohl’s reinforces its ethical framework. And addresses the headwinds buffeting the retail sector.
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