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Kohl's CEO Says the Pandemic Is Transforming Its Stores

The department store chain is making greater use of protective gear and curbside pickups as it prepares for a business cycle that’s significantly different from previous years.
Kohl's store | Source: Shutterstock
By
  • Bloomberg

MENOMONEE FALLS, United States —  Nearly all of Kohl's Corp. locations have reopened after the coronavirus pandemic forced shutdowns in mid-March — but they don't look like they did before.

Chief Executive Michelle Gass described the pandemic as the “great accelerator” that has forced her company to further speed up its migration to expand e-commerce and rethink store operations in order to keep employees and customers free of Covid-19. She pointed to the company’s two-week rollout of curbside pick-up for online orders — a process that in normal times would take much longer.

Sales have steadily increased and are about three quarters of what they were at this time last year at opened stores, Gass said in an interview from Menomonee Falls, Wisconsin, reiterating numbers reportedly shared with investors earlier this month. That’s up from 60 percent in May, and point to consumers’ return after the unprecedented measures that shuttered swaths of the US economy for much of the spring.

The shares slid 1.4 percent on Monday in New York. Kohl’s fell 56 percent this year through Friday.

Like brick-and-mortar peers, Kohl's has seen its business upended in 2020 as nonessential stores were shuttered and consumers dramatically changed shopping habits. As economic reopening inches forward, Kohl's is following a patchwork of state and local mandates across the US. While investor concerns about the future of retail grow, Gass pledged that Kohl's, which has traditionally centred around an offering of affordable, comfortable apparel, will remain relevant.

As it proceeds with the reopening process, Kohl’s is making greater use of protective gear such as Plexiglass barriers, which were ordered around the same time the stores shut down in mid-March, Gass said. At the check out line, associates are now wiping down pin pads after every transaction, while greeters at the front door are doing the same for shopping carts.

Returns for items bought from Amazon.com Inc. — an important partnership for Kohl’s — now have a separate location within the store to reduce congestion. She said that pre-coronavirus, the partnership was driving traffic to stores and the company expects this trend will resume.

Gass said all Kohl’s workers are using masks, while the company is following local rules when it comes to shoppers entering the store. Mask requirements have become a point of contention for American companies as they reopen, with some shoppers refusing to wear them.

The retailer has also been progressively extending its hours after reopening, with stores now operating from 10 am to 8 pm.

Holiday Uncertainty

Kohl’s is preparing for a business cycle that’s significantly different from past years — in particular the key year-end shopping season. Revenue from the latest November-through-January period represented more than a third of total sales for the company’s last fiscal year.

It’s still early to say exactly how it will be altered. She predicted in-store pickup for online purchases and curbside pickup will see heightened popularity. The company is “running multiple scenarios” of what the year-end shopping season will look like, she said.

“I don’t think any of us quite know yet how that holiday season will unfold,” Gass said. “It’s a fair assumption to say that Black Friday and holiday will be different than in year’s past. The consumer has changed, and the environment has changed.”

By Jordyn Holman

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