Kohl’s troubles continue and new changes might not be enough to turn things around.
Kohl’s worked diligently all of third and fourth quarter of 2022 working to reinvent itself and build a stronger retail experience. Last year, Kohl’s was looking for a sale transaction, but citing a volatile market, Kohl’s pulled out of negotiations.
Kohl’s began launching new fashion marketing trends to involve shoppers with passions, such as women-owned business representation, differently-abled shoppers and gender-neutral clothing lines.
Under then-CEO Michelle Gass, the company worked to bring new fashion lines and added marketing campaigns in an effort to diversify its retail offerings. The new lines would come out each quarter for each new season. Kohl’s (KSS) – Get Free Report brought in Buffalo David Bitton to diversify the denim clothing lines as well as bringing Levi’s in to have an exclusive deal to bring back the 90’s Silver Tab line for a limited time.
Kohl’s brought Sephora into its retail floor space expanding into beauty products was a big deal in order to compete with Target. Competitor Target has Ulta Beauty (ULTA) – Get Free Report sharing retail floor space in its stores and online.
Despite making all these changes to the Kohl’s business model, Gass left the company to become the CEO of Levi Strauss Co. in December 2022. Gass started in her Kohl’s role in 2018, after the previous CEO retired. After her departure, Kohl’s announced that Tom Kingsbury would serve as the interim CEO.
Kohl’s Layoffs And Names CEO
Kohl’s announced layoffs from its marketing and merchandising departments at its corporate location in Menomonee Falls, Wis., to increase operations efficiency, according to Retail Dive. The layoffs of roughly 60 employees comes at the same time as Kohl’s deciding to keep interim CEO Tom Kingsbury as the permanent replacement.
Kohl’s decision to retain Kingsbury as permanent CEO was expected, according to CNBC. Kingsbury has previously been CEO of Burlington Stores from 2008 until 2019, when he joined Kohl’s.
“Tom’s exceptional track record growing retail businesses and his deep knowledge of Kohl’s makes him the right choice for Kohl’s next CEO,” said Kohl’s Board President Peter Boneparth.
Kohl’s investor Macellum Advisors had been pushing for leadership changes after the company pulled out of the deal with potential buyer Franchise Group back at the end of second quarter 2022. Kohl’s countless ways it has worked to reinvent itself hasn’t proved to be enough as of yet to bring the department store around.
Macellum And Why Are They Calling The Shots
Macellum Advisors works with dysfunctional boards to help make decision making revolve around performance. The company claims on its website that it targets companies with “self-inflicted problems” that can be fixed. Some of the other big companies Macellum has listed on its website are: Big Lots!, CitiTrends, The Children’s Place, and Bed Bath and Beyond.
One of Macellum’s other brands, Bed Bath and Beyond, announced this past week that it would be closing another 80 or so stores. The majority of those stores are all in New York, New Jersey, and Connecticut. These closures come after the company closed roughly 150 other stores last year and cut about 20% of its workforce, according to NBC New York.
Is Kohl’s heading for the same situation that we’ve seen with Bed Bath and Beyond? The problems that Kohl’s is being faced with it isn’t uncommon. Many other department stores are struggling. While shoppers are back post pandemic, the trends of spending are different with inflation causing more shoppers to be price cautious. The department stores have tried similar methods to activate higher sales with brand partnerships, according to Business Insider.
Macellum has pushed for the removal and replacement of Peter Boneparth, Kohl’s Board President, and despite this, Kohl’s has opted to keep Boneparth and Macellum both to try and work through its financial woes, for the time being. The aftermath of the retail apocalypse isn’t over yet, and it expected to eat away at more retailers fighting to stay afloat to weather the storm.