Home Outlet store Kohl’s says it’s not a department store anymore Kohl’s says it’s not a ‘department store’ anymore

Kohl’s says it’s not a department store anymore Kohl’s says it’s not a ‘department store’ anymore

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Kohls (KSS) on Monday announced plans to add Sephora mini-stores to about 75% of its 1,100 U.S. stores, open 100 new locations at half the size of its brick-and-mortar outlets over the next four years and increase its popular Kohl’s Cash rewards program to 7.5% on purchases, up from 5%. Kohl’s also unveiled new strategies to grow online, including self-service for pick-up orders and returns.

These approaches are part of a larger attempt to change the way consumers view the Kohl’s brand in a department store industry that has been in decline for years. Traditional chains such as Sears, JCPenney and others have been forced out of business, prompting Kohl’s to seek new ways to connect with shoppers.

Kohl’s has lost 17% of its market share since 2011, mostly to discount stores such as TJ Maxx, Amazon and competing clothing brands, according to UBS analyst Jay Sole.

“We are evolving our position from a department store to a more focused lifestyle concept centered around the active, casual lifestyle,” Kohl CEO Michelle Gass said Monday during an investor presentation.

Consumers were dressing well before the pandemic hit, ditching traditional office wear for denim and sneakers, and Kohl’s had expanded its selection of activewear and casual brands in response. Remote work during the pandemic has accelerated this dress trend.

Kohl’s believes it has an opportunity to reinvent itself as a leader in this growing market and plans to add more fitness, athleisure and denim items. “This creates great opportunities for Kohl’s. We expect these trends to continue well into the future,” added Gass.

Market reaction

Wall Street is not convinced that Kohl’s can succeed. Shares fell 13% on Monday and were flat in Tuesday morning trading.

Investor activists on Wall Street have been circling Kohl’s for months, saying the chain has underperformed its competitors and should consider divesting its e-commerce business or going private.

Kohl’s has so far rejected calls for a spinoff or seeking a buyout offer. The company is betting that this new approach can keep activists at bay. “We’re a solid company,” Gass said. “We are reinventing the brand to be more relevant.”