Bonus: Kohl’s making changes in the C-suite

There’s nothing like a reorg during the holidays. Kohl’s has named Ashley Buchanan, current CEO of Michaels and former Walmart executive, as its new chief executive, marking the retailer’s third CEO change in three years. Buchanan, known for his e-commerce expertise, will take over on January 15, 2025, following the retirement of current CEO Tom Kingsbury, who will remain on the board until May to assist with the transition.

The announcement comes as Kohl’s grapples with declining sales and broader challenges in the retail industry, such as muted consumer demand for clothing and home goods amid rising living costs. The company’s shares, down 36% year-to-date, fell 3.3% in after-hours trading, despite a 7.7% gain earlier in the day.

Buchanan’s appointment aligns with Kohl’s efforts to address operational and digital transformation. During his tenure at Michaels, he improved profitability, cash flow, and e-commerce capabilities. Prior to Michaels, Buchanan held leadership roles at Walmart and Sam’s Club, focusing on merchandising and U.S. e-commerce operations.

Kohl’s faces ongoing competition and challenges similar to other retailers like Nike, Under Armour, and Gap, which have also undergone leadership changes to adapt to evolving consumer behaviors. The company’s next quarterly earnings report is expected to provide further insights into its performance amid these leadership shifts.

Kohl’s has underperformed compared to many other retailers in 2024, reflecting challenges in the broader retail and apparel industry. Key comparisons include:

1. Stock Performance:

• Kohl’s shares are down 36% year-to-date, signaling investor concerns over its declining sales and operational strategy.

• In contrast, competitors like Nike and Gap have also faced difficulties, but their declines have been less severe, with Gap focusing on leadership changes to revive growth.

2. Sales Performance:

• Kohl’s has reported year-over-year sales declines, struggling to attract discretionary spending as consumers prioritize essentials due to inflation.

• While Kohl’s in-store Sephora outlets have helped bring in new shoppers, it hasn’t been enough to offset losses in other categories like clothing and home goods.

• Competitors like Target and Walmart have weathered the economic environment better due to diversified offerings and strong grocery sales, which attract consistent foot traffic.

3. Leadership Turnover:

• Kohl’s is on its third CEO in three years, reflecting instability. Other retailers, like Urban Outfitters, Gap, and Under Armour, have also made leadership changes, but Kohl’s frequent shifts signal deeper strategic issues.

4. E-commerce and Adaptation:

• Competitors like Walmart and Amazon have leveraged e-commerce to remain resilient.

• Kohl’s has lagged in digital transformation but hopes incoming CEO Ashley Buchanan, with his e-commerce expertise from Walmart and Michaels, can help bridge the gap.

5. Market Position:

• Kohl’s remains heavily reliant on middle-income consumers, a segment hit hard by inflation.

• More premium brands, such as Lululemon, and value-driven retailers, such as TJX Companies (owner of TJ Maxx and Marshalls), have performed better by targeting niche or budget-conscious shoppers effectively.