Kohl’s holiday look offers a glimpse into the turnaround plan

At Kohl’s stores, chief retailer Nick Jones said shoppers will see a mix of upscale items and sharp prices. For example, the company has signs highlighting the low prices of some sweaters, but has also incorporated European-made glassware into its interior design.

Melissa Repko | CNBC

How buyers travel Kohl’s In stores this holiday season, you’ll see gift ideas, holiday decorations and a possible glimpse into the retailer’s future.

It marks the first peak shopping season under the supervision of Kohl’s new CEO, Tom Kingsbury. The retail veteran who previously ran the off-price chain Burlington Stores, officially stepped into the role earlier this year after previously serving on an interim basis. He succeeded Michelle Gass, who left the company to become CEO-elect Levi Strauss.

Kohl’s launched the latest effort to refresh its brand as the company finds itself in a confusing economic environment and after coming under scrutiny from activist investors and failing to strike a deal to sell to Franchise Group, owner of The Vitamin Shop to complete. Sales and share prices lagged behind.

In trying to turn things around, Kohl’s has focused on improving the appearance of its stores and the brands and merchandise it carries, Kingsbury said. He said that by focusing on popular brands and categories, the company could return to sales growth in 2024.

“Home decor, pets, gifts, stimulus, all the things we’ve talked about are really going to help us get there,” he told investors in an earnings call in August.

Net sales for Kohl’s last full fiscal year, which ended in January, totaled $17.2 billion — a nearly 9% decline from the fiscal year that ended in early 2020, just before the Covid pandemic upended spending patterns .

The company’s shares have fallen about 17% this year, underperforming the S&P 500’s 12% gains and the roughly flat performance of the retail ETF XRT.

Kohl’s has forecast full-year sales to decline 2% to 4%, including the roughly 1% impact of a week-shorter fiscal year.

Along with its own strategy shift, Kohl’s is preparing for a season in which consumers are sending conflicting messages about how much they’re willing to spend and what they think is worth buying, even as some are tightening their belts.

In fact, during a store tour in Ramsey, New Jersey this week, some current items like holiday decorations and fall sweaters were 40% or 50% off, an indicator that the retailer is trying to shift merchandise and appeal to more price-conscious shoppers.

“We know they’re overwhelmed,” said Chief Marketing Officer Christie Raymond. She said the company is monitoring factors such as rising credit card debt, dwindling savings and the return of student loan payments suspended due to the pandemic.

But she added that shoppers are still spending money — sometimes starting early to search for the best deals or perfect items that seem worth their money.

Kohl’s brought its holiday items to stores the first week of October, weeks earlier than the pre-pandemic holiday season in 2019 and even earlier than in recent years when Covid upended the typical shopping rhythm, Raymond said.

Here are the key strategies Kohl’s is pursuing this holiday season and beyond:

Beauty is one of the rare discretionary categories where shoppers are spending despite inflation. Kohl’s has helped by opening more Sephora stores within its branches.

Melissa Repko | CNBC

Bet on beauty

From perfume to mascara, beauty is one of the rare categories where shoppers continue to spend — even as they contend with more expensive groceries, higher interest rates and higher utility bills.

Kohl’s has joined this trend and expanded its stores to include additional Sephora stores. There will be around 900 stores this holiday season – meaning they are now in the vast majority of the more than 1,100 stores across the country. There are also some exclusive items offered, such as gift sets that are only available at Kohl’s.

It will be a larger part of this holiday season. A year ago, about half of all Kohl’s stores had a Sephora shop. Two holidays ago, when the beauty salons were held for the first time, there were 200 locations.

Sephora at Kohl’s has been one of the company’s bright spots, especially at a time when customers are increasingly wary of consumer products. The company’s total cosmetics sales rose nearly 90% year-over-year as of July 29, the end of its most recent fiscal quarter.

Raymond said Sephora has attracted younger, more diverse shoppers to stores but is also popular with Kohl’s longtime customers.

Kohl’s plans to open smaller versions of the stores in its remaining stores over the next few years. And it is looking for ways to get its newfound customers to browse and purchase merchandise in other areas of the store, said Nick Jones, the company’s new chief merchandising and digital officer. He joined Kohl’s earlier this year after working for British retailers including Marks & Spencer and ASDA/Walmart UK.

Kohl’s has expanded the areas where shoppers can snag last-minute items.

Melissa Repko | CNBC

Tendency to make impulse purchases

As shoppers rush around during peak shopping season, Kohl’s wants to entice them to buy one more — or ideally two or three — more things.

Kohl’s has created more space in the checkout area for impulse items and gift items such as candy, small toys and stuffed animals. There is also a dedicated exhibition of Sephora beauty items to take home, such as face masks and lipsticks.

Additionally, gift ideas are scattered throughout the stores, such as aisles where customers can discover a Barbie dream house for their child or a high-tech toaster for their sister-in-law.

Jones said Kohl’s wants to simplify the season for busy families. That doesn’t just mean Not only do they have a wide selection of merchandise, but they also point out good deals, with signs announcing discounts and displays that include creative gift ideas like a colorful sweater, children’s books, or a collection of hot sauces.

Additionally, space was created at the front of stores by removing some checkouts so customers can see trend-focused or seasonal items as they enter.

Kohl’s sells cookware and throw pillows, but also offers other home accessories such as wall art and vases.

Melissa Repko | CNBC

A loot for home

In Kohl’s stores, the area dedicated to pet products is becoming increasingly larger. The retailer stocks dog and cat toys, as well as items like shampoo and treats.

Melissa Repko | CNBC

And something for Fido too

Russell Falcon is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – The content will be deleted within 24 hours.

Related Articles

Back to top button