Kohl’s CEO reveals its ‘shortsighted’ decisions will be reversed – but doubles down on his ‘strategy’ for home goods

Tom Kingsbury, the departing CEO of Kohn, has acknowledged his errors by acknowledging that two strategy decisions have not succeeded in bringing in clients, and he has stated that it is our responsibility to address the issue.

Kingsbury had no issue accepting responsibility for a sharp drop in Kohl’s quarterly sales this week, despite the fact that CEOs rarely acknowledge their mistakes.

The Wall Street Journal reports that Kingsbury told analysts on Tuesday that his choice to reduce fine jewelry and small clothes sizes was to blame for a 9.3% decline in sales.

This week, the company also revealed that Ashley Buchanan, a former Walmart executive, will succeed Kingsbury as CEO in January.

Kingsbury, 72, will continue to serve as a board member and advisor until his retirement in May.

Over the last two years, Kohl’s shares have dropped 52%, and the company’s sales have dropped for 11 straight quarters.

Kingsbury acknowledged that his choice to lower the petite sizes was ill-advised in light of Kohls’ sales figures.

We believed that we could accomplish more with far less, but it didn’t work out for us, Kingsbury stated.

According to Kingsbury, the business will undo those actions.

Kohls has returned jewelry to 200 shops and plans to increase its selection of tiny items.

According to Kingsbury, he anticipates that the change will result in higher sales towards the end of the year.

Kingsbury, however, insisted that his plan to strengthen weak areas like baby and home products was effective.

According to him, we still think that investing in the major growth areas and pursuing our market brand strategy are the best long-term strategic choices.

DEPARTMENT DRAMA

The nation’s department stores are having financial difficulties.

As the industry struggles with shifting consumer behavior, the growth of e-commerce, and inflationary pressures brought on by the epidemic, several large retailers are suffering.

Experts claim that retailers are in financial trouble as a result of rising borrowing prices and consumers restricting their wallets due to continued pressures from the cost of living, as a number of chains, like Walmart, are reducing their physical footprint.

CoreSight, a retail data firm, found that shop closures have increased by 24% in 2024 alone.

Department stores, such as Macy’s, are closing roughly 150 underperforming locations, citing a shift to internet shopping and competition from large box retailers.

Following its September Chapter 11 bankruptcy filing, discount retailer Big Lots has also announced the closing of over 340 of its 1400 locations nationwide.

POOR PERFORMANCE

Even though department stores are having trouble, Kohn’s performance is far worse than Macy’s, which saw a 2.4% loss, and Nordstrom, which saw a 4% gain, when compared to the same period last year.

In recent years, Kohl’s has had trouble keeping its customers.

It declared in 2023 that more than 250 stores would host Sephora pop-up shops.

Additionally, it stated that roughly the same number of locations would carry Babies “R” Us pop-ups.