Kohl’s Chief Executive, Michelle Gass, Will Depart to Join Levi’s

It is also testing a smaller footprint for its stores, and opened a 35,000-square-foot store in Tacoma, Wash., last month. A typical Kohl’s is around 80,000 square feet.

Kohl’s has put a huge emphasis on its partnership with Sephora, which will have 600 shop-in-shops in Kohl’s stores by the end of the year and plans to open 250 more in 2023. Kohl’s sees the partnership generating $2 billion in annual sales by 2025.

Still, Ms. Gass is leaving at a challenging time for the chain. Its core shoppers — middle-income Americans — have faced intense pressure from inflation on a range of items and have pulled back on buying discretionary items like apparel. The holiday shopping season is likely going to be weak, said Craig Johnson, president of Customer Growth Partners, a retail advisory firm.

Kohl’s announced preliminary third-quarter results on Tuesday, reporting that same-store sales fell 6.9 percent and its operating margin was 4.7 percent. It said it would release full quarterly earnings on Nov. 17.

“Clearly she has tried a number of things, but the success in them has been a mixed bag,” Mr. Johnson said. Her successor will have to contend with some structural decisions, he said, including the number of stores that Kohl’s should have. The chain has 1,100 across the United States.

Ms. Gass joined Kohl’s in 2013, after a long tenure at Starbucks, where she was credited with creating the Frappuccino and its caramel drizzle. On Tuesday, Kohl’s praised her efforts to reshape the company for a younger generation.

“Under her leadership, the company has driven a strategic transformation, expanded its partnerships and brand portfolio, and supported an inclusive and collaborative culture,” Peter Boneparth, Kohl’s chairman, said in a statement.

Article source: https://www.nytimes.com/2022/11/08/business/kohls-chief-executive-departure.html