Kohl’s sales on rebound as stores evolve

Nearly all Kohl’s Corp. locations have reopened after the coronavirus pandemic forced shutdowns in mid-March — but they don’t look like they did before.

CEO Michelle Gass described the pandemic as the “great accelerator” that has forced her company to further speed up its migration to expand e-commerce and rethink store operations in order to keep employees and customers free of COVID-19. She pointed to the company’s twoweek rollout of curbside pickup for online orders — a process that in normal times would take much longer.

Sales have steadily increased and are now about three quarters of what they were at this time last year at opened stores, Gass said. That’s up from 60 percent in May and points to consumers’ return after the unprecedented measures that shuttered swaths of the U.S. economy for much of the spring.

Kohl’s shares have fallen 56 percent this year through Friday.

Like brick-and-mortar peers, Kohl’s has seen its business upended in 2020 as nonessential stores were shuttered and consumers dramatically changed shopping habits. As economic reopening inches forward, Kohl’s is following a patchwork of state and local mandates across the U.S. While investor concerns about the future of retail grow, Gass pledged that Kohl’s, which has traditionally centered around an offering of affordable, comfortable apparel, will remain relevant.

As it proceeds with the reopening process, Kohl’s is making greater use of protective gear such as plastic glass barriers, which were ordered around the same time the stores shut down in midMarch, Gass said. At the checkout line, associates are now wiping down pin pads after every transaction, while greeters at the front door are doing the same for shopping carts.

Returns for items bought from Amazon.com Inc. — an important partnership for Kohl’s — now have a separate location within the store to reduce congestion. Gass said that before the virus, the partnership was driving traffic to stores. The company expects that this trend will resume, she said.

Gass said all Kohl’s workers are using masks and that the company is following local rules when it comes to shoppers entering stores. Mask requirements have become a point of contention for U.S. companies as they reopen, with some shoppers refusing to wear them.

Kohl’s is preparing for a business cycle that’s significantly different from past years — in particular the key year-end shopping season. Revenue from the latest November-through-January period represented more than a third of total sales for the company’s last fiscal year.

It’s still early to say exactly how it will be altered. Gass predicted that in-store pickup for online purchases and curbside pickup will see heightened popularity. The company is “running multiple scenarios” of what the year-end shopping season will look like, she said.

“I don’t think any of us quite know yet how that holiday season will unfold,” Gass said. “It’s a fair assumption to say that Black Friday and holiday will be different than in year’s past. The consumer has changed, and the environment has changed.”