The trio of activist investors who cleaned house at Bed Bath & Beyond are looking to do the same at Kohl's (KSS -4.01%).

Macellum Advisors, Ancora Holdings, and Legion Partners Asset Management, which own a combined 9.5% stake in the department store chain, want to appoint nine directors to Kohl's 12-person board.

There are a number of issues the activist investors want the retailer to take, but a priority is having directors with retail experience to work alongside CEO Michelle Gass to turn the company around.

Kohl's order pickup station

Image source: Kohl's.

A fish rots from the head

When the hedge funds targeted Bed Bath & Beyond, it was a wholesale cleansing they were looking for. They saw then CEO Steven Temares as much a part of the problem as the entrenched board, which included the home goods retailer's co-founders.

With Kohl's the situation is different. In a site created to explain their position called, the private equity firms say over the past decade Kohl's has fallen behind its rivals, losing market share and suffering gross margin contraction, even as it has spent more on operational expenses, capital investments, and executive compensation.

Yet it notes this has happened over various management teams, so it's not necessarily their problem. What has remained mostly constant at the retailer is the board of directors.

They want Kohl's to improve its merchandising while reducing costs, partially through sale-leaseback arrangements. While they want to realign executive compensation and incentives with performance, they're also looking to juice earnings through "material share repurchases," which would serve to give their equity stake in the retailer a quick boost.

Two of the three hedge funds have also targeted Big Lots (BIG -5.48%) where they similarly want to replace the board of directors.