Kohl’s sales drop 20% in 2020 as activist investors target retailer
CEO Gass: ‘We enter 2021 with strong momentum’
Kohl’s Corp. sales were down around 20% in 2020 as the retailer navigated the coronavirus pandemic that shuttered stores and changed consumer preferences, the company said in filings with the Securities and Exchange Commission Tuesday.
Kohl’s finished the year with sales down 10.1% in the fourth quarter — its best comparable performance since before the pandemic. Sales were down about 40%, 22% and 13% in the first three quarters of 2020.
Overall in 2020, sales were down 20.4% for the Menomonee Falls-based retailer, according to the filing with the SEC. The company’s fiscal year and fourth quarter ended Jan. 30, 2021.
But 2019 wasn’t a blockbuster year for comparison. Kohl’s ended 2019 with overall sales down 1.3%.
“After an extraordinary year managing through the pandemic, we ended the year in a very solid financial position, and we enter 2021 with strong momentum,” Kohl’s CEO Michelle Gass said in a news release. “We are pleased with the progress we are making against our strategic initiatives and we are set up to deliver a multi-year improvement in sales and operating margin. Several newly announced initiatives will come to life for our customers in the year ahead, most importantly the launch of our Sephora partnership in August.”
The retailer’s sales in recent years and stagnant stock price have made it the target of activist investors. A campaign by activist investors seeks to take over the company’s board of directors. The group first outlined its intentions in a letter to shareholders last week.
The group of investors is the largest shareholder in Kohl’s, controlling around 9.5% of the company’s stock. The investors are trying to take over nine seats on Kohl’s 12-person board of directors. The group includes Macellum Advisors GP LLC, Ancora Holdings Inc., Legion Partners Asset Management LLC and 4010 Capital LLC.
Kohl’s leadership has rejected the
group’s advances.
The company said it expects sales to rebound in 2021. Kohl’s is anticipating that net sales will increase “in the midteens percentage range” in comparison to the prior year.
The retailer has new partnerships launching this year like its deal with specialty beauty store Sephora to create beauty destinations inside Kohl’s. It has also announced partnerships with Calvin Klein, Eddie Bauer and Cole Haan in recent months.
Kohl’s stock closed up 36 cents at $57.36.
The pandemic has been especially tough for retailers like Kohl’s that were deemed nonessential during governmentimposed shutdowns. The pandemic forced Kohl’s to close all of its more than 1,150 locations in 49 states for weeks last spring.
Kohl’s has trimmed its workforce in response. The company announced in September it would reduce its corporate workforce by around 15% as a cost-cutting measure.
The number of positions affected was not released. Kohl’s has thousands of people on its corporate staff, so the reduction is hundreds of jobs.
Kohl’s laid off around 250 corporate positions in February 2020 in a corporate restructuring prior to the pandemic.