How Two CEOs Mixed Romance and Business, Leading to Scandal -- WSJ

Dow Jones
21 May

By Sarah Nassauer and Suzanne Kapner

The Vaquero Club is tucked away behind stone walls in a wealthy suburb of Dallas. The gates protect a swanky neighborhood of Texas-size mansions, a pristine golf course and a lake stocked with bass.

Residents pay for seclusion and privacy, but it's one of those gated communities where secrets are hard to keep.

On a recent Friday evening, Ashley Buchanan and Chandra Holt headed to the Vaquero clubhouse for dinner, as they often do. Buchanan, 51, in a white polo shirt, and Holt, in a shaggy cream vest, sipped cocktails at the bar, according to a person who saw them. It was her 45th birthday. The pair showed no signs of having been engulfed in a corporate scandal that got Buchanan fired as CEO of Kohl's -- which had become public just the day before.

Earlier that week, Kohl's chairman and an outside lawyer had confronted Buchanan, according to people familiar with the matter. The Kohl's board was investigating after an employee raised red flags. Buchanan had helped broker a deal for Kohl's to sell products from a coffee startup called Incredibrew. It was run by Holt, and the CEO hadn't disclosed their personal relationship, violating the retailer's ethics code.

Kohl's Chairman Michael Bender had known Buchanan and Holt for years. The three executives had worked together at Walmart a decade ago. But Bender, who led the board that had hired Buchanan a few months earlier, didn't know they were a couple.

The lawyer demanded to know: Was Buchanan dating Holt?

Yes, he replied.

It was an admission of a relationship that had been gossiped about for years among employees, but kept out of view of many corporate leaders and board members. First at Walmart, then crafts retailer Michaels and now Kohl's. But it wasn't really hidden. Both Buchanan and Holt had filed for divorce from their respective spouses in 2020. Court records showed an extramarital affair with Holt had a role in Buchanan's divorce. And the couple lived openly at Vaquero, where they play tennis together and share a $3 million stone house with a koi pond and private pool.

While a CEO doesn't have to share his or her love life outside of work with the board, most companies require executives to disclose relationships that could result in potential conflicts of interest. Both Buchanan and Holt had run major retail chains -- she had been CEO of Bed Bath & Beyond and another retailer. They had worked together and hired staff from each other's companies. Holt had also started a coffee brand that was being marketed to both Kohl's and Michaels when Buchanan was running them.

Buchanan and Holt had largely kept quiet with co-workers and the companies that employed them about their romantic relationship, according to people who worked with them and court documents.

Michaels tried to recruit Holt for a senior role soon after Buchanan became CEO of the crafts retailer in 2020, and Buchanan didn't disclose that he had a personal relationship with her at that time, according to one person familiar with the matter. Holt didn't end up taking the job.

Later on, Buchanan also didn't disclose his relationship with Holt to some merchants -- the employees who choose which products to buy -- when Michaels decided to sell Incredibrew at its stores.

After he was fired by Kohl's, Buchanan's defense was that he made introductions for merchants but didn't require them to buy particular products, according to one person who spoke with him.

On May 1, Kohl's said it fired Buchanan for cause after an investigation by outside lawyers found he had violated the company's ethics code, saying he had helped arrange a deal to sell Holt's coffee products. Buchanan had dictated the payment terms, and the order was for hundreds of Kohl's stores, according to a person familiar with the situation.

Kohl's said the terms were "unusual" and favorable to the vendor. The investigation also found that he caused Kohl's to enter into a multimillion-dollar consulting agreement at Boston Consulting Group, where Holt was an adviser at the time.

In an interview that day, Holt said she has known Buchanan for 10 years. She said they weren't romantically involved when Michaels was looking to hire her and that her Incredibrew business hadn't been compensated by Kohl's.

Boston Consulting Group said it was surprised to learn of Holt's relationship with Buchanan. "As a result of this non-disclosure, we have terminated Chandra Holt's contract," BCG said in a statement at the time. The firm said it had employed Holt on a part-time basis to provide advice on retail topics. BCG said she wasn't involved in structuring the Kohl's assignment or negotiating any contract terms. The work for Kohl's hadn't started by the time Holt's contract was terminated, according to people familiar with the situation.

Meeting at Walmart

Buchanan and Holt met a decade ago in Bentonville, Ark., when she took a job in 2015 as a vice president with Sam's Club, the warehouse chain owned by Walmart. Buchanan was running Walmart's dry grocery business at the time.

Holt, a Minnesota native, had started her career at Target, where she spent a decade, then worked a few years at Walgreens. After she joined Walmart, Holt and her then-husband and young daughter moved into a home in the Pinnacle Country Club, a gated golf community near Walmart's headquarters that is filled with its top executives.

Buchanan lived around the corner at Pinnacle with his then-wife and three daughters. The Texas native had worked at Walmart since 2007 and was a rising star within the executive team. He was known as a tough negotiator with Walmart's suppliers, and as a blunt leader who gave his direct reports autonomy.

At the start of 2017, Buchanan became Holt's boss after he was named chief merchant for Sam's Club. A few months later, Holt was promoted to lead the Sam's Club grocery business. The following year, she left his group when she was appointed chief operating officer of the chain's website.

In Northwest Arkansas, a region where many inhabitants have ties to Walmart or its suppliers, chatter circulated about Buchanan's close relationship with Holt. That was in part because Buchanan, Holt and their children spent time together without their spouses, and in part because Buchanan discussed his troubled marriage with friends and co-workers, according to former and current Walmart executives.

His wife had a serious illness, so he went on many social outings without her. He worried about his wife and the toll her illness took on their children, some of those executives said.

Despite the troubles at home, Buchanan's career was advancing and he was viewed by some colleagues as a contender to take over as Sam's Club's next CEO. In November 2019, Sam's Club picked a new leader, but it wasn't Buchanan. He was named to another executive role at Walmart.

Around Christmas 2019, Buchanan told Walmart U.S. Chief Executive John Furner that he was leaving Walmart to become the CEO of Dallas-based Michaels, according to some of the executives.

Buchanan and his family made plans to move to Southlake, Texas, a western suburb of Dallas. On Jan. 3, 2020, soon after they arrived, Buchanan filed for divorce -- setting off legal proceedings that would later reveal the affair with Holt.

Moving to Texas

Holt was exploring a new role in early 2020. She had been approached by Michaels to serve in a top merchandising position reporting to the CEO. But a nonpoach agreement with Walmart made the move difficult, and Holt stayed at Walmart, where she was promoted around that time.

Her marriage was also troubled. She separated from her husband in March 2020, then filed for divorce in October of that year. The couple would twice call off their divorce before making it official in 2024, according to filings.

In the summer of 2021, Holt left Walmart to become CEO of Conn's HomePlus, a regional homegoods retailer based near Houston.

As Buchanan and Holt moved their lives to Texas, they mostly kept their romantic relationship quiet. They recommended each other's companies to potential hires, in some cases, without disclosing their personal ties. For Conn's, Holt hired an executive that had worked at Michaels, where Buchanan was CEO.

Top executives at Michaels said they didn't know the pair had a romantic relationship until more Walmart employees later joined the company, passing along gossip from Arkansas and as Buchanan's divorce proceedings trickled into the open.

In early 2021, shortly before Buchanan's divorce was finalized, private-equity firm Apollo Global Management agreed to purchase Michaels and take it private in a $3.3 billion deal. Buchanan stood to receive $32 million from his stake in the deal, according to divorce filings submitted by his ex-wife's lawyer.

His ex-wife sued to set aside their October 2020 settlement plan and accused Buchanan of fraud for not disclosing the coming transaction. Buchanan disputed the claim in court. Terms of the pair's final settlement aren't known.

Introducing Incredibrew

Holt left Conn's in October 2022 and founded Incredibrew, a company that sells K-cup coffee pods infused with supplements such as collagen and melatonin. It was incorporated in July 2023 at her then home address near Houston, state records show.

In early 2024 she was hired as CEO of Bed Bath & Beyond after the homegoods chain had emerged from bankruptcy. By mid-June, she was out. The company said it was part of a leadership reorganization, and she didn't publicly comment at the time. She refocused on her coffee startup.

Meanwhile, Buchanan was in discussions to join Kohl's as its CEO. The chain was looking for a new leader after years of sales struggles, pressure from activist investors and strategy shifts. Days before Thanksgiving, Kohl's said Buchanan was taking over in January.

The Incredibrew capsules started being sold at Michaels, nestled in the candy area near the cash registers. They were also being sold online. Some former Michaels employees told The Wall Street Journal they wondered at the time why the chain was selling coffee since it doesn't have a grocery section.

In a series of LinkedIn posts this year, Holt started promoting Incredibrew. She said she had been working on it for the past two years and unveiled new products. In one video, she talked about the health benefits of the collagen infused coffee. "It's amazing for hair, skin and nails as well as bone and joint health," she said.

Buchanan reposted the video, which appeared to have been filmed in front of a gas fireplace in the home they share in the Vaquero Club community. Holt said the pods would be available online at Walmart and Amazon.

At Kohl's, Buchanan's brusque management style quickly ruffled feathers inside the Menomonee Falls, Wis., headquarters. Buchanan had a residence in Wisconsin but it isn't known how much time he spent there.

Within Buchanan's first months on the job, Kohl's was preparing to buy Incredibrew products. As part of the normal process of vetting a new vendor, a Kohl's employee raised concerns, according to people familiar with the probe. The board was notified and an outside law firm conducted an investigation.

On April 30, Bender, the Kohl's chairman, and a lawyer called Buchanan to share the findings of the investigation, including the Incredibrew order and the arrangement with BCG, surprising Buchanan. That's when they confronted the CEO about his relationship with Holt.

The following morning, Kohl's issued a statement that said Buchanan had been fired for cause. Bender stepped down as chairman to assume the role of interim CEO while the retailer looks for a permanent replacement.

Write to Sarah Nassauer at Sarah.Nassauer@wsj.com and Suzanne Kapner at suzanne.kapner@wsj.com

 

(END) Dow Jones Newswires

May 20, 2025 21:00 ET (01:00 GMT)

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