Kohl’s Fires CEO for Directing Millions to Romantic Partner, After Better Than Feared Earnings

Kohl’s shares rise as much as 8.2% after the department store’s preliminary 1Q results came in ahead of expectations. In addition, CEO Ashley Buchanan has been terminated due to undisclosed conflicts of interest. Bloomberg's Mary Ross Gilbert reports.

Kohl’s Corp. fired its chief executive officer only months into his tenure after the board uncovered that he directed millions of dollars of business to someone he has had a romantic relationship with, according to a person familiar with the matter.

The company said it’s starting a search to find a permanent CEO replacement following the departure of Ashley Buchanan, who came to Kohl’s in January from retailer Michaels Cos. Chairman Michael Bender will serve as Kohl’s interim CEO, according to a statement.

The company declined to comment beyond its statement and public filings. Buchanan didn’t immediately respond to requests for comment.

Buchanan’s business dealings were with a woman he has been involved with romantically named Chandra Holt, said this person, who was unauthorized to speak publicly on the matter.

The two served together as executives at Walmart Inc.’s discount chain Sam’s Club in the late 2010s. Holt then served brief stints as the CEO of retailers Bed Bath & Beyond and Conn’s Inc. She is now a consultant and the founder of vitamin-seller Incredibrew.

“I’ve known Ashley Buchanan for 10 years, but I have not received any compensation for my Incredibrew business from Kohl’s,” Holt told the Wall Street Journal, which earlier reported the relationship.

Buchanan’s relationship with Holt was an open secret inside Walmart, their past employer, and across the retailer’s hometown of Bentonville, Arkansas, according to people familiar with the matter.

Three months ago, Holt congratulated Buchanan for his new role as CEO of Kohl’s on a public post on Linkedin. Later, Buchanan reposted a video on LinkedIn from Holt promoting her Incredibrew products.

Board Probe

Buchanan’s termination follows an outside investigation overseen by the board’s audit committee.

The probe determined that Buchanan “had directed that the company conduct business with a vendor founded by an individual with whom Mr. Buchanan has a personal relationship on highly unusual terms favorable to the vendor.”

Buchanan pushed the company to enter into a multimillion dollar consulting agreement wherein the same individual was a part of the consulting team, the board found. Kohl’s said that in neither case did Buchanan disclose this relationship as required under company’s code of ethics.

The retailer said that Buchanan’s termination is unrelated to the company’s performance and did not involve any other company personnel. He’ll also be required to reimburse the firm $2.5 million from his signing bonus, it said.

Town-Hall Meeting

At a surprise town-hall meeting Thursday at an auditorium in Kohl’s headquarters in Menomonee Falls, Wisconsin, Bender and Chief Financial Officer Jill Timm addressed employees who were told their boss had been fired hours earlier.

While the meeting didn’t provide information beyond the company’s public statements, Bender urged employees to keep their heads down and focus on their work, according to a person who listened to the town hall, which was also broadcast to remote employees.

Bender spoke calmly, at times using a teleprompter, explaining that he knew the sudden departure may cause some uneasiness but that it was important to push through with the company’s current turnaround plan, said this person, who wasn’t authorized to speak publicly on the matter. Bender didn’t address whether the personal relationship was romantic or provide employees with the chance to ask any questions.

Employees had been shocked by the news, with Buchanan engendering goodwill among many staffers since he took the helm a few months ago, the person said.

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