Kohl’s was once a retail darling, carving out market share as a department store catering to the middle-income American consumer with coupons and deals that drove loyalty. Over the past five years, Kohl’s stock has lost nearly 70% of its value, plummeting as the retailer reported weak sales.
As department stores struggle to stay relevant and middle-income consumers face budget pressure, Kohl’s is now trying to reinvigorate sales by leaning back into its core value proposition and investing in the store experience to ensure customers find what they need and keep coming back for more.
CEO Michael Bender told journalists, “For us, it’s really about making sure that we are picking a lane.”
The company, which went public in 1992, saw its peak in the early 2000s as department stores gained traction around the U.S. It was known for its value, proprietary brands, coupons and rewards, enjoying success along with other department store chains.
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Sonia Lapinsky, managing director of retail at consulting firm AlixPartners, said because of its reputation for deals and promotions, Kohl’s has to offer a strong value proposition in addition to a worthwhile in-store experience, which sets it apart from other retailers. “They have to have a compelling product offering, they have to have the right prices, they have to have the product that consumers want to go into the store and to know that they’re getting the best deal — that’s really what the consumer is looking for, and that’s where they’ve gone other places for,” she said.
Bender said while the signs toward recovery are encouraging, it’s only the first step in a longer road into the “neighborhood” of growth. “We have not arrived yet,” Bender said. “I don’t want anyone to feel like we planted that flag and said, ‘We’re done.’ We’re still in the early innings, quite honestly, but we are moving in a direction that is much more positive and aligned with a lot more clarity about the direction that we want to take the company.”
Kohl’s shares have climbed more than 130% in the past year.
It has been trying to capture younger consumers through its market shift in strategy.
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