Kohl’s Corp. is considering cutting ties with the search firm that helped recruit its last chief executive officer, who the company fired just months into his tenure.
Most major search firms offer a guarantee to do a second search if the initial placement goes haywire within the first year. Kohl’s isn’t sure it wants to go back to its original recruiter, Heidrick & Struggles International Inc., and has reached out to at least one rival firm, according to people familiar with the matter who aren’t authorized to speak publicly.
The beleaguered retailer has formed a special committee to select its next leader after it fired Ashley Buchanan several months into his tenure. Buchanan was accused by the company’s board of directing millions of dollars of business to someone he has had a personal relationship with. That person was Chandra Holt, whom he has been romantically involved with, Bloomberg News reported.
Heidrick representatives didn’t reply to multiple requests for comment. Kohl’s declined to comment for this article but previously said the board conducted a “thorough and customary background check” with an investigative firm and detailed reference checks.
Blue Heron Research Partners, which analyzes the efficacy of management teams on behalf of investors, found that there were concerns about Buchanan’s ethics, integrity and business judgment. The firm conducted interviews with Buchanan’s former colleagues before he got the top job at Kohl’s.
‘Yellow and Red Flags’
“There were clearly yellow and red flags around Buchanan as a CEO that went beyond this specific conflict of interest,” said David Rynecki, Blue Heron’s founder and CEO. “I’m surprised the board didn’t know about this.”
Buchanan didn’t respond to a request for comment.
Since he was terminated, new details have emerged about Buchanan’s previous roles, including when he was an executive at Walmart Inc. Some employees who worked with him at the time were questioned about personal relationships he may have had at the company, Bloomberg News reported.
Michael Bender, who served as Kohl’s board chair, is now serving as interim CEO. Bender held previous executive roles at Walmart, where both Buchanan and Holt also worked. Bender didn’t respond to a request for comment.
Kohl’s has been attempting to find its footing as increased competition and a strained consumer have led to three years of declining sales. The company has had several CEOs since Michelle Gass left the company at the end of 2022. Its stock has fallen about 40% this year to date.
