Menomonee Falls, Wisconsin — Kohl’s Corp. is navigating turbulent waters following the dismissal of its CEO, Ashley Buchanan, on allegations of misconduct. The retailer announced the board’s decision on Thursday, citing violations of company policies related to vendor transactions with undisclosed conflicts of interest.

An investigation, led by external counsel and overseen by the board’s audit committee, concluded that Buchanan directed the company to engage with a vendor linked to a personal relationship of his, all while failing to disclose this connection as mandated by the company’s ethical guidelines. This decision resulted in interim CEO Michael Bender stepping into the role, with the board planning to work with a search firm to identify a permanent replacement.

In addition to his termination, Buchanan is required to forfeit all equity awards, including a $2.5 million signing incentive. Details regarding the vendor relationship were not disclosed in the company’s filings; however, reports have surfaced linking Buchanan to Chandra Holt, a former Walmart colleague and the founder of a consulting firm and a vitamin-infused coffee brand.

Kohl’s emphasized that Buchanan’s dismissal was unrelated to the company’s financial performance or ongoing operations. The retailer is in a precarious position, having experienced significant upheaval in recent years, with two previous CEOs unable to turn the struggling business around. Buchanan had recently proposed a strategy focusing on proprietary brands, aiming to enhance the retailer’s profitability.

Despite these efforts, Kohl’s is facing challenges, projected to see a decline in comparable sales and operating income for the first quarter of 2025. The retailer is set to announce detailed financial results later this month. The board’s leadership transition raises further questions about the stability of Kohl’s amidst a backdrop of declining sales and operational issues.

Industry analysts view Buchanan’s abrupt exit as symptomatic of deeper challenges within the company. Neil Saunders, managing director at GlobalData, remarked that the incident not only highlights potential oversight in Buchanan’s appointment but also places Kohl’s in a precarious position without a robust leader at a critical time.

Bender steps in with over three decades of experience, having held significant roles in the retail and consumer sectors, including leadership at Walmart and L Brands. While he remains on the board, Bender will relinquish certain committee positions during his tenure as interim CEO. The board is also poised to announce a new chair soon with hopes of stabilizing leadership amid ongoing challenges.

The necessity for an effective succession plan is underscored by recent real estate decisions, including store closures and the discontinuation of a fulfillment center. Financial analysts have raised concerns regarding Kohl’s liquidity, given the company’s increased leverage and upcoming debt obligations.

As Kohl’s seeks to navigate this tumultuous period, the board’s next actions will be critical in determining the path forward for the retailer, which continues to operate approximately 1,000 stores across the United States.