The retailer is trying to understand the activists’ proposition

Kohl CEO Michelle Gass said the retailer was doing due diligence after receiving a letter from activist group Engine Capital urging the company to consider either a sale of its business or a separation of its e-commerce division .

“My number one priority, the number one priority of the board, is to generate shareholder value,” Gass told CNBC’s Sara Eisen in an interview Wednesday afternoon. “We are very aligned with all of our investors to do this. We have an ongoing dialogue with many investors. We listen to them. We hear their ideas. And we take it very seriously.”

Regarding Engine Capital’s proposal, Gass said the company has done “a lot of work and will continue to do a lot of work to understand what this means for our business.”

“As we would with any great idea, we devote a lot of resources to understanding what this means for our business,” said Gass.

Engine Capital has an approximate 1% stake in Kohl’s.

The trend to part ways with the digital part of a retailer has grown in popularity as investors consider owning a part of a faster growing e-commerce business. The Saks Fifth Avenue department store chain separated its e-commerce business into a separate entity earlier. This year. The online business is said to be preparing to go public at a valuation of $ 6 billion, or about six times revenue. It had a valuation of $ 2 billion as of March.

Meanwhile, department store operator Macy’s has been urged by activist group Jana Partners to divest its e-commerce operations from its stores, in the hope of achieving greater valuation. Macy’s has since hired the consulting firm AlixPartners to review its business structure.

Despite the high valuations, some experts argue that the separation doesn’t make much sense if the two companies still share as many back-end operations such as the same warehouses or merchandising teams.

Kohl’s shares closed around 2% lower on Wednesday. The stock has climbed about 25% since the start of the year.