Will Kohl’s be known for something other than its retail partners?
A New York Times interview with Michelle Gass, condensed for clarity, posits that the Kohl’s CEO has sought to create a unique identity for the chain since replacing Kevin Mansell in 2018. Just how much progress she has made in that endeavor has been questioned by activist investors and industry watchers alike.
One of the most prominent features of Ms. Gass’ tenure has been the deepening of relationships with other retail brands, specifically Amazon.com, a deal made under her predecessor, and with Sephora.
She has consistently praised the working relationship with Amazon over the years with claims that accepting returns for the digital giant has brought new customers into Kohl’s stores.
Even recent reports that Amazon is considering opening its own department stores have not prompted Ms. Gass to cast doubt on what she sees as a complementary relationship between the two companies.
“We do returns really well and we provide a seamless experience to their customers. And what we get in return is new customers, traffic,” she said on Kohl’s second quarter earnings call last month. Ms. Gass added that Kohl’s conversion rate with Amazon return customers has been improving.
She called the deal to place “Sephora at Kohl’s” shops inside her company’s stores part of a “game-changing partnership” that will lead consumers to think of Kohl’s as “a leading beauty destination.”
Kohl’s began debuting the first group of Sephora shops last month and expects to open 200 this year, another 400 in 2022 before reaching its goal of 850 total by the end of 2023. The 2,500-square-foot shops located at the front of stores feature 100 brands curated to appeal to Kohl’s female customers. Ms. Gass said the new shops “are absolutely beautiful and truly showcase the power of the Kohl’s transformation.”
Just how much transforming has taken place under Ms. Gass’ leadership has been a topic of some debate. A group of activist investors earlier in the year called for a board shakeup claiming the retailer had failed to keep pace with changes in the marketplace.
Ms. Gass, who made it through that tumult, continues to maintain that Kohl’s is very different from department stores and has a distinct identity in the minds of consumers.
“We are very far apart from what a traditional department store is,” she told the Times. “We are small, we’re super convenient and that allows us to do things like buy online, pick up in-store and curbside. But more importantly, we see ourselves as a specialty concept, that Kohl’s is the curator and the editor to bring you all the products and brands you need to lead a more active and casual lifestyle.”
- Brick-and-Mortar Retail in the Age of Covid, and Amazon – The New York Times
- Will Amazon department stores spell trouble for Kohl’s? – RetailWire
- Kohl’s (KSS) Q2 2021 Earnings Call Transcript – The Motley Fool
- Sephora to set up shops in 850 Kohl’s stores – RetailWire
- Activist investors attempt takeover of Kohl’s board of directors – RetailWire
DISCUSSION QUESTIONS: What do you see as Kohl’s brand identity and to what extent is it wrapped up in those of its partner brands? Does it hold a distinct place in the marketplace and where do you see opportunities for it to set itself apart?