Miami, Florida – With a fresh leadership shift, Kohl’s is looking to regain its footing in the competitive retail landscape. Ashley Buchanan has stepped into the CEO role, tasked with steering the well-known department store chain back toward success. However, after an extended period of declining sales, diminishing stock performance, and eroding customer confidence, reversing the company’s downturn presents a formidable challenge.
Kohl’s, which operates over 1,150 stores nationwide, has faced setbacks due to a combination of internal decisions and external market conditions. The rise of e-commerce giants, persistent inflation, and the long-lasting economic effects of the COVID-19 crisis have significantly reshaped the retail industry. Numerous companies have either downsized, filed for bankruptcy, or closed altogether in response to these pressures.
Reevaluating Past Strategies
Buchanan inherits a company that has seen numerous shifts in strategic direction under previous leadership. Former CEO Tom Kingsbury made substantial changes, scaling back private-label brands, reducing petite clothing selections, and minimizing fine jewelry offerings. These departments were replaced with partnerships featuring Sephora and Babies “R” Us, a continuation of a transformation plan initiated before Kingsbury took over.
While these efforts were intended to modernize the brand and attract new shoppers, they also distanced long-time patrons who had come to rely on Kohl’s for affordable yet quality fashion choices.
“If you want customers to keep visiting your stores, you must offer compelling reasons for them to come back,” said Jean-Pierre Dubé, a marketing professor at the University of Chicago Booth School of Business.
During Kingsbury’s tenure, Kohl’s struggled to break free from financial troubles. Sales have now declined for 11 consecutive quarters, and share values have plummeted by nearly 50% in just a year.
“Kingsbury failed to maintain a connection with Kohl’s loyal shoppers while also struggling to engage the younger audience he had hoped to attract,” Dubé added.
Although Sephora’s in-store presence showed some success, its growth was insufficient to offset losses in apparel, footwear, jewelry, and home goods. A Moody’s report highlighted that despite increased sales in beauty products, the retailer saw a steep decline in key revenue-generating categories.
Customer Discontent and Strategic Missteps
When Kingsbury, formerly of Burlington Stores, assumed leadership in 2022, Kohl’s was already dealing with excess inventory. Clearing out the surplus became a priority, but in doing so, many in-demand product lines were reduced or eliminated.
“Kingsbury emphasized efficiency in inventory management, which led to a dramatic reduction in the apparel selection,” explained Charles Lindsey, a marketing professor at the University of Buffalo.
Under his leadership, Kohl’s introduced 140 Sephora locations within its stores, as reported in its third-quarter 2024 presentation. However, the retailer’s core audience—middle-class, budget-conscious shoppers—did not respond positively to this shift.
“Dedicated Kohl’s customers felt alienated by the changes,” said Dubé. “They weren’t looking for premium products inside their go-to department store. The strategy conflicted with their shopping expectations.”
Recognizing these miscalculations, Kingsbury eventually admitted that the adjustments had not yielded the desired outcomes.
“We are not pleased with our 2024 performance and are implementing decisive measures to address declining sales,” he stated in a company briefing.
Efforts to recover included reintroducing petite-size apparel, expanding private-label clothing options, and bringing fine jewelry back to 200 locations.
With Buchanan now at the helm, it remains to be seen which strategic direction the company will take moving forward.
“The timing is crucial for Kohl’s to rediscover its brand identity,” remarked Deb Gabor, a brand strategist and bestselling author. “The company must determine what sets it apart from competitors and lean into that strength.”
For Kohl’s to successfully revamp its business, making stores more attractive and refining its product offerings will be essential, added Michelle Greenwald, a professor at New York University’s Stern School of Business.
“Once customers walk away, they often find alternatives that suit their needs,” she noted. “There’s no guarantee they’ll return. In many cases, they’re lost permanently.”
The Broader Retail Outlook
Kohl’s struggles are not unique in the retail industry. The broader sector has faced significant challenges, with over 7,300 retail locations shutting down in the past year alone. According to data from Coresight Research, this represents a 57% surge in closures compared to 2023, marking the highest store closure rate since the pandemic’s peak in 2020.
Major chains, including CVS and Walgreens, collectively shuttered more than 1,000 outlets. Big Lots and Family Dollar also faced significant closures, each reducing their footprint by hundreds of locations.
Retailers catering to middle-income shoppers have been hit particularly hard. Rising inflation has stretched household budgets, leaving less disposable income for non-essential shopping. Consequently, many consumers have gravitated toward discount retailers like Walmart, which offer more cost-effective options.
“Competition has evolved dramatically,” Gabor told CNN. “Retailers must adapt quickly or risk being left behind.”
As Kohl’s gears up for its next chapter, Buchanan’s leadership will determine whether the company can successfully realign with its core audience while also appealing to a new generation of shoppers. With a strategic approach and a well-planned Kohl’s sale initiative, the department store chain has a chance to regain its competitive edge.
