Kohl’s, the Menomonee Falls, Wisconsin-based department store chain, announced on Friday that it would be closing 27 underperforming locations in 15 states by April, representing a small portion of its overall 1,150-store network. The closures are part of an effort to boost profitability and reverse the company’s ongoing struggles with sagging sales. This move comes as Kohl’s continues to struggle with declining financial performance, having posted 11 consecutive quarters of sales declines.
The decision to close these stores follows a trend of declining retail performance that has affected many brick-and-mortar chains, especially those in the department store sector. Kohl’s, like many of its competitors, is attempting to adapt to changing consumer shopping habits and the growing dominance of e-commerce. As consumers increasingly shift their purchases online, traditional department stores face significant challenges in maintaining foot traffic and achieving profitable sales.
While the closure of 27 stores may seem like a relatively small number compared to Kohl’s total store base, it marks a significant step in the company’s efforts to streamline operations and focus on its most profitable locations. These closures are expected to help Kohl’s reduce operational costs and reallocate resources to stores and initiatives that have the potential for better performance.
In addition to the store closures, Kohl’s is undergoing a leadership change. The company announced that Ashley Buchanan, a retail veteran and current CEO of Michaels, will take over as the new chief executive of Kohl’s next week. Buchanan’s appointment is seen as a pivotal moment for the struggling department store chain, as it seeks to revitalize its business and address the challenges facing the broader retail landscape. Buchanan brings years of experience in retail, having previously worked at Walmart and other prominent companies in the industry. She will assume the role of CEO from Tom Kingsbury, who has been serving as Kohl’s interim CEO since December 2022 and was named the permanent leader in February 2023. Kingsbury, who will remain with the company as an advisor and continue serving on Kohl’s board until his scheduled retirement in May, oversaw a turbulent period for the company, which included a series of leadership changes and attempts to reinvigorate its business.
The timing of the store closures and leadership change reflects the company’s ongoing efforts to navigate a retail environment that has been increasingly challenging for traditional department stores. Kohl’s, like many others, has faced pressure from online giants like Amazon, as well as shifting consumer preferences, which have led to fewer visits to physical stores and a growing demand for e-commerce options. Despite these challenges, Kohl’s has made moves to differentiate itself by focusing on its brand partnerships, such as its collaboration with the popular athleisure brand, Under Armour, and its growing presence in the beauty and wellness market.
Kohl’s future success will depend largely on how well it can adapt to the evolving retail environment, particularly in light of its leadership transition and ongoing efforts to address its sales issues. The company’s ability to streamline its operations, invest in its most promising locations, and strengthen its online presence will be critical in determining whether the 27 store closures will ultimately help the company turn a corner in its long-standing battle with declining sales.
