NEW YORK (The Deal) -- After a second-quarter earnings miss, Kohl's (KSS) - Get Report has become vulnerable to activist investors.

The Menomonee Falls, Wis.-based department store operator's stock price reflects the disappointment in its performance. Tuesday, the shares closed at about $50, near a 52-week low of about $49. Given that reaction, investors could be receptive to a hedge fund seeking changes. After all, rival retailers Macy's (M) - Get Report and Dillard's(DDS) - Get Report have both succumbed to activists in recent months.

In Kohl's case, the company's valuable real estate is an even more powerful lure than its sagging stock price. According to its latest 10-Q, filed on June 5 with the Securities and Exchange Commission, for the quarter ended May 2 Kohl's lists property and equipment valued at about $8.5 billion.

That's significant when contrasted with a market cap near $10 billion. The real estate includes stores, distribution centers and headquarters. As of Jan. 31, 2015, Kohl's owned 413 of its 1,162 stores.

Activists will also be drawn by the numbers on the retailer's balance sheet. With a $10 billion market cap, the retailer would have an enterprise value of $14.1 billion, when about $5 billion in debt is added and about $900 million in cash is subtracted.

That's a multiple of only about 5.42 times the nearly $2.6 billion in adjusted Ebitda Kohl's generated during the fiscal year ended Jan. 31, 2015, according to data provided by Bloomberg.

Meanwhile, the debt alone represents a multiple of less than two times adjusted Ebitda. Retailers can comfortably borrow up to four times Ebitda and remain investment grade.

Lastly, Kohl's may not have the right leadership. Management's answer to the struggles is a so-called Greatness Agenda, which involved developing a loyalty program and adding more national brands.

The retailer has also made an effort toward localizing assortments at its stores. But industry sources said that proposition can be difficult if what a retailer is selling varies too much between stores and what it sells online. Nordstrom (JWN) - Get Report , for example, centralized its buying decisions so that the same goods were sold in its stores and on the Web.

Kohl's will need better answers after missing second-quarter numbers, as it comes under increased pressure from off-price retailers such as TJX Cos.'s(TJX) - Get Report T.J. Maxx, as well as a revived J.C. Penney(JCP) - Get Report , which is considered a direct competitor.

Kohl's is testing an off-price retail version of its own, under the moniker Off-Aisle. But the aim for now is to sell merchandise that has been returned at a deep discount.

Such a concept might make sense, if Kohl's weren't already in the business of hocking clothes already regarded as discounted. Instead of adding new revenue, the chain could end up cannibalizing sales, because Kohl's current concept has been built on offering a mixture of national and private label brands at the most affordable prices.

Many of the brands Kohl's offers-Levi's, for example-are available at other retailers, so fitting in off-price goods that are either in the luxury category or unique or exclusive to its own stores might be a better solution. Such a move would create a treasure hunt for consumers, who might also buy staples-like Levi's.

An activist could argue that new leadership would be more likely to pursue such creative solutions. The analyst community is skeptical of management's current explanation for poor performance-the shift from July to August in tax-free events tied to the back-to-school shopping season.

Peter Kimball, vice president of ISS Corporate Solutions, notes that its shareholders include institutions that have a history of supporting activist campaigns. In addition, the company does not have staggered director elections, making it easier for an activist to gain influence on the board.

Taken together, a slumping stock price, valuable real estate, underperforming management and weak takeover defenses make Kohl's a big, lumbering target.

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