New York – Kohl’s has abruptly fired its recently appointed CEO, Ashley Buchanan, after just under five months on the job. The company cited unethical behavior as the reason behind the decision.
In a statement, Kohl’s said Buchanan was terminated “for cause”—a serious move in the corporate world—after an outside legal investigation revealed that he had directed the company to enter into vendor deals that presented undisclosed conflicts of interest. The company emphasized that the termination had nothing to do with its financial performance or any other employee.
Buchanan, who previously led Michaels (the arts and crafts chain), took over as CEO on January 15, hoping to steer the struggling department store chain in a new direction. However, during his short tenure, sales dropped by as much as 4.3%, according to preliminary earnings figures.
Kohl’s board chairman, Michael Bender, will serve as interim CEO while the company searches for a permanent replacement. Investors reacted positively to the news, with shares of Kohl’s (KSS) jumping as much as 8% following the announcement.
Retail analyst Neil Saunders of GlobalData Retail called Buchanan’s departure a “distraction the company does not need and can ill afford,” noting that while the dismissal wasn’t performance-related, it raises questions about the company’s hiring process. “It gives the impression that Kohl’s is in a perpetual state of chaos,” he said, calling the event “a blow upon a bruise.”
Kohl’s, like many traditional department stores, has faced a tough road in recent years. The company has been hit hard by shifting shopping habits, competition from e-commerce, high inflation, and a general pullback in consumer spending. As part of its ongoing efforts to streamline operations, Kohl’s recently announced the closure of 27 stores, leaving it with around 1,100 locations.
This News Originally appeared on www.edition.cnn.com
