UPDATE 1-Engine Capital pushes Kohl's to review sale, separate e-commerce business

(Adds statement from Kohl's, details on Engine Capital)

Dec 6 (Reuters) - U.S.-based hedge fund Engine Capital LP is pushing Kohl's Corp to consider a sale of the company or separate its e-commerce division to improve its lagging stock price.

Engine Capital, which owns about 1% stake in Kohl's, said on Monday the department store has underperformed both the S&P 500 and other retailers in recent years, despite its large retail footprint and real estate holdings.

Shares of the company, which were up about 4% on the news, have risen about 19% this year, while peer Macy's Inc has more than doubled. The S&P 500 index is up nearly 21% in 2021.

The New York-based hedge fund added that Kohl's should consider a strategic review of the whole company, including a sale, adding that it believes there are sponsors that would pay at least $75 per share or a 50% premium.

Engine Capital, known for being instrumental in a $2 billion sale of Ann Taylor brand parent Ann Inc in 2015, said Kohl's e-commerce business alone could be worth $12.4 billion or more.

Kohl's in response said the company continues to examine all opportunities for maximizing shareholder value.

Engine Capital's proposal comes at a time when retailers have doubled down on their online businesses following the e-commerce boom during the COVID-19 pandemic that drove people to shop online as they avoided crowds at brick-and-mortar stores.

Last month, Macy's Inc said it was working with consulting firm AlixPartners after activist investor Jana Partners pushed for a sale of its digital business, while Hudson's Bay Co-owned Saks Fifth Avenue has said it would spin off its e-commerce segment.

Earlier this year, Kohl's also faced pressure from a group of activist investors to add board members with retail experience, following which it added three new directors. (Reporting by Deborah Sophia in Bengaluru; Editing by Shinjini Ganguli)