MENOMONEE FALLS, Wis. — Kohl's Corp. announced Monday it has entered into exclusive negotiations with Franchise Group, Inc. for a possible sale.
Franchise Group is looking to buy the company for $60 per share. Kohls and Franchise Group have established a three-week exclusive negotiations period.
Franchise Group owns brands like The Vitamin Shoppe, Pet Supplies Plus, and American Freight.
There is no guarantee that any agreement will be reached.
"The purpose of the exclusive period is to allow (Franchise Group) and its financing partners to finalize due diligence and financing arrangements and for the parties to complete the negotiation of binding documentation," Kohls said in a statement Monday,
According to our partners at the Milwaukee Business Journal, Kohl's stock price closed Monday at $42.12 per share. It jumped $5.68 per share in after hours trading to $47.80 per share as of 7:50 p.m. CST.
Much of the national focus of this potential buyout is on the numbers, stockholders, and negotiations. But for most people in southeast Wisconsin, it is more personal. Kohl’s was created here and is part of the fabric of Wisconsin. So, what does this deal mean for us?
“It could be a dramatic change for our area,” said Mark Kass, Editor-in-Chief of Milwaukee Business Journal. “Anytime a company gets sold, there’s the fear that their corporate headquarters will leave the area, and it’s a real possibility.”
The deal could be done within three weeks.
“I’m not really happy about it,” said Heidi Geyer, who is a loyal Kohl’s customer and worked as an information technology consultant at the company’s headquarters in Menomonee Falls.
“I really want the company to stay local,” she said. “They employ a lot of people and do so much for our area. I loved my time working there. The company headquarters is huge. They have a cafeteria, wellness center, on-site daycare, shuttles in the wintertime. Even as just a consultant, they treated me very well. This is just another example of how the retail industry is struggling and changing.”
Kohl’s employs 8,000 people in Wisconsin and about 4,000 of them work at the corporate level.
“You can almost guarantee that some people will lose their jobs because there are going to be things in their infrastructure that are redundant, whether in human resources or accounting,” said Kass. “You do not acquire another company and keep everything the same."
Kass says our entire area will feel the loss if Kohl's moves out of state or downsizes. Just in the past three years, Kohl's and Kohl's Cares donated more than $32 million to Wisconsin non-profits. The company has long-standing partnerships that support many local landmarks and organizations.
“They give out nearly $10 million a year here locally,” said Kass. “Will that still happen under a new owner based out of state? It will in some capacity, but not at the same level.”
New ownership would also likely mean some changes to Kohl's stores and the shopping experience. Kass anticipates many store locations to downsize.
Right now, Kohl's has a partnership with Sephora and with Amazon for returns in-store.
How all of this would be impacted remains to be seen. Kohl's current management is declining to comment during negotiations.