Michelle Gass’ Master Plan at Kohl’s Starts to Click Into Place
Under pressure from analysts and reporting sales declines for the year, the CEO’s vision is coming together.
Michelle Gass — pressured by an activist assault, COVID-19 and rapid retail evolution — is pressing ahead with her master plan to reinvigorate Kohl’s Corp.
And the pieces are starting to come together for the chief executive officer. Kohl’s put a tough 2020 into the books on Tuesday, logging a sales decline of
20.1 percent for the year, but said it is expecting sales to bounce back, rising by a percentage in the mid-teens this year.
As Kohl’s starts to come out of the retail coronavirus funk that has hit the industry hard, a different company is emerging. Most importantly, Kohl’s is adding Sephora shops that are intended to draw customers to a reworked and more aspirational women’s business, which will soon include looks from Calvin Klein.
The key question now might be: Is that enough change?
Activist investors Macellum Advisors, Ancora Holdings Inc., Legion Partners Asset Management and 4010 Capital, which together control 9.5 percent of the company, are pushing for greater change, including more aggressive real estate sales. They have supported an alternative slate of directors at the company’s annual meeting, in effect trying to stage a coup.
Gass told WWD on Tuesday that, “We have attempted to have constructive conversations” with the activists. “We like to find common ground.”
But the talks weren’t enough. The activists previously said Kohl’s offered up two board seats, but that they rejected the offer as insufficient. Now the fight to swap out the board is on.
The pressure comes just as the pieces of the strategic puzzle come together at Kohl’s.
“I think about Kohl’s and it’s about driving relevance in people’s everyday lives,” Gass said. “Everything we’re doing right now is connected back to that strategy.”
That includes a bigger push in active and casual looks and big changes in the women’s apparel offering, where many brands have been eliminated and the assortment has been focused. In the fall, Kohl’s will start selling Calvin Klein men’s underwear, women’s intimates and loungewear in over 600 stores. The brand joins Nike, Under Armour, Adidas, Champion, Columbia and others.
All of these changes link back to the larger strategy and will be reinforced by