Thursday, 3 Dec 2020

Michelle Gass on Sharpening the Kohl’s Approach

Kohl’s Corp. is bouncing back from the depths of the coronavirus consumer shutdown — and continuing to sharpen its focus in women’s. 

The off-mall retailer was already trimming its portfolio in women’s with the exit of Dana Buchman, Jennifer Lopez, Mudd, Candie’s, Rock & Republic, PopSugar, Elle and Juicy Couture. Now, Michelle Gass, chief executive officer, is going further.

“In 2021, we will further iterate and evolve the portfolio to drive even more relevancy,” the ceo told analysts on a conference call on Tuesday. “This will include moving away from the Apartment 9 brand in women’s as we shift our focus to Nine West, and exiting the Chaps brand altogether. We are going to tightly manage the brand portfolio, and we’ll exit additional down-turning brands to make room for new relevant brand introductions.”

But the plan is to be judicious and not add back as many names.

“We want to make sure that we’re hitting it across both our core customer and new customer,” Gass said. “And the customer is telling us they want greater clarity, they want fewer choices, and what we do put in front of them has to be more meaningful. And I’m really encouraged by the progress.

“We have more in the pipeline as we look ahead into 2021 and beyond,” she said. “So it’s the product that we offer. It’s how we merchandise and doing a lot more, call it storytelling, but with reduced inventory and choice counts. We have more space in the store to make a greater shopping experience and we’re seeing that resonate with our customers. And this is both in stores and it’s digital, and our personalization engine is also really important to make sure that we can target customers with the right message.”

View Gallery

Related Gallery

Bride of the Times

Kohl’s is reinventing amidst the pandemic, also doubling down on active, expanding Lands’ End to another 150 doors for a total of 300 and building in beauty as it looks to position for a post-pandemic world. 

Already the off-mall specialist is making up lost ground — and investors like what they see. Shares of Kohl’s shot up 8 percent to $28.25 in midday trading on Wall Street.

The company’s third-quarter net losses tallied $12 million, or 8 cents a diluted share, and compared with year-ago earnings of $123 million, or 78 cents. On an adjusted basis, the retailer eked out a profit of $2 million, a steep drop from $116 million a year earlier, but a welcome result after two straight quarters of losses.

Revenues for the three months ended Oct. 31 fell 14 percent to $4 billion from $4.6 billion — marking improvement after a decline of 23.1 percent in the second quarter and 40.6 percent in the first three months. 

Digital sales gained by 25 percent from a year ago. 

Given the enormous and unusual disruptions from the pandemic, many analysts and investors are looking beyond the past few quarters to the holiday season for hints on just how well positioned retailers are for next year. And Kohl’s is offering something akin to normality by planning to reinstate dividend payments in the first half, a show of financial strength that was also underscored by the company’s ability to repay its revolving credit facility this quarter and its cash stockpile of $1.9 billion.

But just like Kohl’s, the whole industry is in the midst of supercharged change with everyone sensing the same opportunities. 

Target, for instance, is also going after beauty, but with the help of Ulta.

On a call with reporters, Gass said beauty was a “large and attractive market.”

“There is a lot of innovation and transformation happening in the industry — there’s room for Kohl’s,” she said, adding that the company’s omnichannel muscle and its off-mall format made it a “formidable player in the beauty industry.” 

Ultimately, Gass said Kohl’s and the consumer are changing in ways that will last beyond the pandemic.

“I actually think the current trends are in our favor,” she said in response to a question from WWD, pointing to the increased focus on casual looks and healthy living.

And she said the “homebody economy” would remain even as people start to venture back out. 

“Home as the center of our lives will continue,” she said. 

That impacts home goods, but also what people wear and how they stay active. 

“There’s more Americans working out than not working out,” she said. “And that data flipped during the time of COVID-19.”

More from WWD: 

Simon’s Takeover of Taubman: What the Future Holds

Mike George to Depart From Qurate Retail Next Year

Retail Sales Bouncing Back, Fashion Still Falling

 

Source: Read Full Article