Kohl’s just fired its brand new CEO for unethical behavior

Kohl’s Kohl’s has had headline-grabbing shareholder activism that included the abrupt ousting of its C.E.O., Ashley Buchanan, only months into the job. He is leaving as the company reels from accusations of unethical behavior that have jolted the business and prompted larger questions about how accountable leadership is and about corporate oversight. Buchanan, who was hired as its chief executive in January 2025, had been meant to help right the ailing department store chain. Instead, he is departing under a cloud of scandal after an internal investigation found that he broke serious rules of the company during his time in charge.

The company said it had fired Buchanan “for cause,” an unusual and major decision in the corporate realm. An outside investigation determined he had ordered the company to engage in transactions with vendors that presented undisclosed conflicts of interest. In simpler language, he was using his role to help conduct business that could have profited him or close associates, without informing the company. The company said that these actions did not involve Kohl’s financial reporting or other employees, but a decision to fire a chief executive just months into the job is also one with outsize implications.

Previously, Buchanan was the CEO of arts and crafts retail chain Michaels. His appointment had been hailed as a bold move to help turn around Kohl’s, which is struggling amid weakening sales and mounting competition in a challenging retail landscape. Yet his stint in office was also followed by further reversals. According to a review of preliminary financial results from Kohl’s, the company’s sales declined by 4.3 percent during his brief time on the job — far short of the turnaround that shareholders were looking for.

The company’s board of directors has named Michael Bender, the current chairman, interim CEO as they search for a new permanent CEO. But the market actually applauded the departure of Buchanan, it surprisingly rose. Shares in Kohl’s jumped as much as 8 percent after the announcement, indicating that investors may have already lost faith in his leadership or are hopeful that new leadership can turn the company around.

Retail analysts are less sanguine. The firing comes as a distraction for the company at a particularly bad moment, said Neil Saunders, managing director at GlobalData Retail. “While the dismissal may have nothing to do with overall company performance, it does add to the perception outside the company that things are a bit shaky. Saunders said it was a “blow upon a bruise,” meaning the move exacerbates already existing problems instead of addressing them.

Like many traditional department stores, Kohl’s has been under extreme pressure in recent years. Shifting consumer tastes, the rise of online shopping and persistent inflation have made it difficult for brick-and-mortar companies to stay profitable. On top of Western leadership woes, the company also is facing the reality of declining foot traffic and ever-more price-sensitive shoppers.

Earlier this year, Kohl’s also shared plans to shutter 27 locations in the U.S. These closures have brought the company’s total store count to about 1,100, representing a significant reduction in the retailer’s store footprint. The move is part of a broader shift in the industry, in which many legacy retailers are rethinking their physical footprints as they try to adjust to a more digital economy.

The repercussions of Buchanan’s firing could be widespread. For Kohl’s, they raise questions of how closely executives are scrutinized and what kinds of internal controls should exist to keep similar problems from happening in the future. For shareholders, it casts further doubt on the direction of the company and questions about who is leading. For the general business public, the case should stand as a reminder that not even top brass is immune from examination and answerability.

The road that lies ahead for Kohl’s is unclear. With interim leadership now secured and a search for a CEO underway, the company needs to move fast to win back the trust of investors and navigate a new course. The scandal is an unnecessary wrinkle to an already difficult environment and who knows, maybe the company does come out stronger. Or maybe this is just another chapter in its struggles.