Kohl’s Appoints Third CEO in 3 Years
Sales for Wisconsin-based department store chain have fallen for nearly 3 years.
Kohl’s. Photo by Mike Mozart.
The department store giant Kohl’s has named its third CEO in three years as the Wisconsin-based company continues to struggle to reverse nearly three straight years of losses.
Former Walmart executive and Michael’s CEO Ashley Buchanan formally took over as the head of the company based in Menomonee Falls on Jan. 15.
This move comes as Kohl’s faces a multitude of grim financial markers. The retailer announced in early January that 27 stores will be closed by April. None of those locations are in Wisconsin.
Sales for the company have declined for 11 consecutive quarters and the company’s shares are down more than half of what they were two years ago, according to reporting from The Wall Street Journal. Comparable sales — a metric that measures revenue compared to a similar period in the past — dropped by 9.3 percent last quarter at locations that were open for at least a year, according to a Kohl’s press release.
Suzanne Kapner, a reporter following the retail industry for the Journal, recently told WPR’s “Wisconsin Today” the declines are partially due to a series of changes like incorporating Sephora and Babies R Us additions to existing Kohl’s stores.
“On the face of it, that sounds really smart. Those tend to pull younger customers, and brands do need to add new younger customers to survive,” she said. “But in order to make room for those new shops, they took away some areas that were really important to its existing customers.”
Kohl’s reverses changes following continued declines
Kapner said the department store chain made several key changes in the past few years, like removing fine jewelry departments and reducing its petite clothing options from stores.
But not all changes have backfired for the department store. Outgoing CEO Tom Kingsbury said in March that Sephora additions at Kohl’s locations were bringing in younger shoppers, 40 percent of whom were purchasing additional items.
“It seems like (Kohl’s is) on the right track with those ideas. They may have just overshot in terms of space allocation,” Kapner said.
After Kohl’s announced Kingsbury was being replaced in January, he directly acknowledged that Kohl’s made mistakes during his tenure, the Journal has reported.
“We thought, ‘We can do more with a lot less,’ and that didn’t work out for us,” Kingsbury told a group of investors in November.
Declining Kohl’s sales reflects larger department store challenges
Other department store chains have struggled in recent years, as well.
Macy’s saw a 2.4 percent sales decrease last quarter, according to the company. JCPenney saw net sales fall 8 percent last fiscal quarter. Department store sales dropped 1.3 percent overall last year compared to 2023, according to U.S. Census data.
Nancy Wong is a professor of consumer science at the School of Human Ecology at the University of Wisconsin-Madison. She said department stores are grappling with multiple types of challenges at the same time, including demographic changes and economic pressures affecting America’s middle class.
“Given the economic turbulence and challenges that we’ve been facing in this country, the segments that are most financially squeezed are the middle class — the core segments of the customers that most department store chains used to enjoy,” Wong said.
“The market has basically been divided into two segments now: the bargain shopping and the discount chain stores; the other (segment) is to go high-end,” she continued.
Wong said department stores broadly are now facing an existential question: Why should shoppers go to a physical store if things can be delivered to shoppers at home?“Stores have to think of different ways of enticing customers to actually enjoy that journey,” Wong said. “Maybe offer certain things that are not replicable elsewhere, that actually give customers a fuller way to explore certain product categories that (department stores) could excel in.”
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Kohl’s appoints third CEO in 3 years as sales continue to decline for Wisconsin chain was originally published by Wisconsin Public Radio.
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