New Kohl’s CEO, Ashley Buchanan, must map a new path forward

The situation: New Kohl’s CEO Ashley Buchanan, who assumed the position last week, inherits a department store chain with 11 consecutive quarters of declining sales and a 47% drop in market cap over the past year.

The road map ahead: To attract new customers, Kohl’s leaned into partnerships with Sephora, Amazon, and Babies R Us, relaunched the tween apparel brand Limited Too, and expanded its assortment of branded apparel.

• However, these initiatives required changes that frustrated long-standing customers, including removing some private-label brands, cutting petite clothing sizes, and scaling back its fine jewelry selection.
• Buchanan now faces the challenge of charting a new path that balances the interests of Kohl’s new, younger customers—enticed by partnerships with Sephora, Babies R Us, and Limited Too—and its loyal, older customer base. At the same time, he must find ways to attract more store shoppers to reverse the retailer’s declining traffic. That won’t be easy.
• As CEO of Michaels, Buchanan employed a multipronged strategy to revive that retailer, including streamlining its supply chain, improving store cleanliness, restocking shelves, opening new locations, and revamping its website to enhance usability and introduce an online marketplace.
• His leadership also paved the way for Michaels to go private—experience that could prove valuable if Kohl’s opts to follow the example of Nordstrom and other department stores in seeking relief from the short-term pressures of public markets.

Our take: Kohl’s is in a tough position, facing fierce competition from off-price retailers, direct-to-consumer brands, and mass merchants like Amazon. To fend off those merchants, Buchanan must sharply define Kohl’s own identity, rather than relying on the strength and brand equity of other brands to bolster its appeal.

Go further: Read how Kohl's and other department stores performed in our Retail & Ecommerce Earnings Q3 2024 report.

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