Kohl’s, one of the largest department stores in the United States, is searching for a new chief executive after firing its current chief, Ashley Buchanan, who had been on the job since only Jan. 15, the company said on Thursday.
The department store chain said that Mr. Buchanan, 51, had “violated company policies by directing the company to engage in vendor transactions that involved undisclosed conflicts of interest.”
Mr. Buchanan’s termination, the company said, was “unrelated” to Kohl’s performance. Still, the abrupt departure of the chief executive has come at a challenging time for the retailer, with sales falling and dampening interest from younger shoppers. The chain has not posted an increase in sales since late 2021.
No other employee was involved in the events leading up to Mr. Buchanan’s termination, the company said.
Mr. Buchanan did not immediately respond to requests for comment.
Kohl’s hired Mr. Buchanan to be its chief executive in November, when he held the same position at Michaels, the crafts retailer, a role he had since 2020.
The company discovered Mr. Buchanan’s violation after an investigation by an outside firm hired by Kohl’s. The company has appointed Michael J. Bender, director of its board, as interim chief executive.
The company said in a filing with the Securities and Exchange Commission on Wednesday that Mr. Buchanan had directed the company to “conduct business with a vendor founded by an individual with whom Mr. Buchanan has a personal relationship on highly unusual terms favorable to the vendor.”
The filing said that same individual was also part of a consulting team with which the company had a multimillion-dollar agreement, at Mr. Buchanan’s direction.
Mr. Buchanan did not disclose the relationship, the filing said, as the company’s policy requires.
Mr. Buchanan was the third chief executive at Kohl’s since 2018. Tom Kingsbury served as interim chief executive after Michelle Gass left in December 2022 to run Levi Strauss & Company.
That year, Kohl’s said it was opening Sephora stores at all of its locations to bring more shoppers, specifically younger ones, into its mostly suburban stores. The company also has a partnership with Amazon, which allows customers to return packages at Kohl’s sites. Both initiatives were begun during Ms. Gass’s tenure to bring shoppers in.
More recently, the department store has been trying to improve its merchandise, adding more home décor options and making the Sephora locations within its stores a more central part of the strategy.
In the same news release that announced Mr. Buchanan’s termination, Kohl’s also released preliminary earnings expectations for the first quarter of the year. The expectations are on the same track the company has been on: falling sales and narrowing profit. The chain said it would release its full earnings on May 29.
Neil Saunders, the managing director for retail at GlobalData, a research and consulting firm, said Mr. Buchanan’s sudden departure was a blow to the company’s efforts to turn things around.
“While the sacking is not related to performance, it gives the impression that Kohl’s is in perpetual state of chaos and it raises some questions about the due diligence over his appointment,” he wrote in an email on Thursday.
“Kohl’s now needs to find someone with the requisite skills to enact a quick turnaround and get the company back onto the front foot,” he added. “Given the deep-seated problems at the chain, this might be a tall order.”
David Swartz, a senior equity analyst at Morningstar, a financial services firm, said the department store chain was desperately in need of stability, because “right now, it has none.”
Mr. Swartz, who noted that the company “has struggled even in relatively good times,” said the search for a new chief executive was “going to delay the process of fixing this business.”
“There needs to be a new long-term plan from a new C.E.O.,” he said. “Unfortunately, it looks like it’s going to be a while before that’s going to happen.”
Kohl’s was among the many retailers hit hard by President Trump’s tariff announcement in April. Its share price tumbled in the immediate aftermath of the announcement.
The company said in the S.E.C. filing that Mr. Buchanan would forfeit any bonuses and equity awards he received from the company as part of his hiring, and that he would be required to reimburse Kohl’s a part of his $2.5 million signing bonus.
Susan C. Beachy contributed research.
