Kohl’s (KSS) board of directors has ousted CEO Ashley Buchanan for cause, citing violations of company policies related to undisclosed conflicts of interest in vendor relationships.

Trading in Kohl’s shares was temporarily halted Thursday morning following the announcement, according to Bloomberg. Shares later rose over 9%, signaling investor approval of the board’s decisive action.

An investigation found Buchanan violated company policies in two separate instances by directing vendor transactions involving undisclosed conflicts of interest.

According to the Wall Street Journal, the retailer dismissed Buchanan after discovering he had directed the company to pursue a “highly unusual” business arrangement involving Chandra Holt, a woman with whom he had a romantic relationship, sources familiar with the matter said. Buchanan met Holt while the pair worked at Walmart together. Holt went on to become CEO of Bed Bath & Beyond and later a consultant for Incredibrew.

The filing also stated that he had pushed the company to enter into business with this vendor, including a multimillion-dollar consulting agreement in which the woman he was romantically involved with was part of the consulting team. 

Buchanan didn’t disclose the relationship, which violated Kohl’s code of ethics and ultimately led the board to fire him for cause. Because of that, Buchanan has also been removed from the board and withdrawn as a nominee for reelection at the 2025 shareholders meeting.

Buchanan, who assumed the CEO role in January, was the retailer's third CEO in three years. He previously led the privately held Michael’s craft chain and held senior roles at Walmart (WMT) and Sam’s Club. 

Buchanan’s appointment came with a hefty price tag: a compensation package totaling approximately $20 million, more than double the $9 million received by his predecessor, Tom Kingsbury. Per the Journal's report, Buchanan forfeited his equity awards and will have to return part of his $2.5 million signing bonus.

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The shake-up at Kohl's comes as many retail chains have been under pressure from consumers being squeezed by persistent inflation and high interest rates. Now, President Trump’s tariffs may threaten prices, shopper behavior, and margin pressure, adding another layer of uncertainty to the industry trying to turn things around.

Read more: What Trump's tariffs mean for the economy and your wallet

Kohl’s has struggled to land a sustained recovery. In March, the company reported a 9.4% year-over-year decline in fourth quarter revenue, with same-store sales falling 6.7%. Adjusted earnings per share dropped to $0.95, a steep drop from $1.67 in the same period a year earlier.

The company’s 2025 outlook offered little reassurance. Same-store sales are expected to decline between 4% and 6%, greater than the 0.55% drop analysts had forecast.

During his brief tenure, Buchanan moved quickly to make changes at the retailer, announcing plans to cut 10% of corporate staff and close 27 stores by April. Despite those efforts, analysts remained skeptical, and shares decreased by nearly 50% year to date.

Buchanan was tasked with undoing many of the retailer’s missteps, including moving away from private-label brands. He also planned to refocus on key categories such as fine jewelry, petite apparel, intimates, and home decor while trying to strengthen the retailer's growth areas through its partnerships with Sephora.

In response to the leadership change, the board has appointed Michael Bender as interim CEO, effective immediately. Bender has served on the board since July 2019 and was named board chair in May 2024.

Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv.

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