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00:00You're thinking short term they're thinking long term they're already doing some of what you would do. You know leave them alone. Is there an argument to be made that activism tends to focus on short term results. That's not the case here. That's not the case with Encore. If you take if you really take a hard look at Kohl's you mentioned 10 years underperformance. It's actually 20 years. You invested a dollar in Kohl's 20 years ago. It'd be less today. And we're not in the short term. We're not. We're not doing this for a trade. If you really take a hard look at where Coles has come from and I really think that's important because from 2011 to 2019 they spent six point six billion dollars in cap ex. An earnings crater 44 percent. 20 20 throw away. So tough year. It was a tough year a 20 20 throw away. We are not in this for the short term. If you take a look at the board that we're putting up versus the five candidates that they have where the five existing board members that they have I don't think anybody is going to say. That's objective that the slate that we're putting in can't add value to the organization. You know I wonder what you can do with the assets. I mean I realize that over the last 10 years sales have gone up fivefold but there hasn't been a lot of change in CPS. There hasn't been a lot of change in margin certainly not to the upside. And you know I think about Peter Lynch who recently talking to Barry Ritholtz said it doesn't matter who you put in charge. You could put in charge Elon Musk or Bill Gates or any incredible business magnate. If you don't have the right assets they're not going to be able to do anything with it. Do you think you can do something really with Coles in this climate. Absolutely or we wouldn't want to invest it in the name. Of course we do. This is not just a financial engineering game. If you take a look at where their their stores are located they've got a good tailwind because mall retailers have been you know they've been in trouble. They have an opportunity to gain market share away from them. Now they have some really strong competitors. And that's why the execution the operating efficiency is critical here. It's critical. And if you take a look again at a couple of the people that we are bringing to this board that's what they have. They have operational experience that have been enormously successful. Yes. Do we think they should do something with a sale leaseback program. Of course we do. They've got 5 to 7 billion of of capital tied up in real estate that's free and clear. So why not take some of that capital. If you truly believe and that's this is what they set. If you truly believe in their plan and the stock is sitting here and they are successful the stock is cheap. So why not take some of that capital and buybacks that their competitors did raise their dividend. And some of them raise them to above that pre pandemic levels. They they brought their dividend back to a buck way below pre pandemic levels. So there are some things that are going on here that as a shareholder we clearly don't understand. And the best way to effect change is to be in the room is to be in the room and we want to be in the room with them. We own less than 10 it off just under 10 percent. You've said a pretty detailed analysis of what you think contributed to the underperformance at Kohl's that man in management could theoretically take it as a blueprint or a roadmap to work from. But you note you have noted as a group that the culture may be part of the problem a kind of a long term embedded culture. It's probably why you want nine directors. How easy would that would that be to change even if you did kind of get your to get the directors you the five directors you want. Listen to culture culture. It is difficult to change but it can change. It can change with the right. With what I believe is the right governance at the board level. You talk about culture. You talk about what the employees of cold calls have gone through in 2020. Very difficult year for the for the workers. A lot of them laid off. Lot of them furloughed. But here we go. The board gives the CEO a 43 percent pay raise from 2019 and 2019 was a great year. So if you want to talk about culture you gotta start at the board level. That's where the management team is going to be held accountable. Create a sense of urgency and they will be rewarded if they perform. But they shouldn't be rewarded if they don't perform. I don't think anybody disagrees with that.

Kohl's Has Underperformed for 20 Years, Ancora's DiSanto Says

Ancora Holdings Chairman and CEO Fred DiSanto discusses his views on Kohl's Corp. with Bloomberg's Amanda Lang and Matt Miller on "Bloomberg Markets." (Source: Bloomberg)

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