Kohl’s to Close 27 Underperforming Stores by April as It Struggles with Declining Sales
Kohl’s has announced it will close 27 of its underperforming locations across 15 states by April. While this represents only a small portion of its 1,150 stores, the move is part of the department store chain’s efforts to boost profitability and turn around its struggling sales. The closures come after Kohl’s has posted 11 consecutive quarters of declining sales.
Leadership Change as Kohl’s Works to Revive Business
Kohl’s new CEO, Ashley Buchanan, will take over the reins next week. Buchanan, a retail veteran and current CEO of Michaels, will succeed Tom Kingsbury, who has served as Kohl’s interim CEO since December 2022. Kingsbury will continue to advise the company and remain on the board until his scheduled retirement in May 2025.
Store Closures and Employee Impact
Kohl’s has not disclosed how many employees will be affected by the closures, but the company has assured workers that they were informed in advance. A “competitive severance package” has been offered to those impacted, along with opportunities to apply for other roles within the company. Of the 27 stores closing, 10 are located in California.
Department Stores Face Growing Challenges
Kohl’s struggles reflect broader challenges facing U.S. department stores. As consumers continue to shift towards online shopping, traditional department stores are feeling the pressure. Kohl’s aims to address these challenges by focusing on long-term growth strategies, though it acknowledged that some difficult decisions—like store closures—are necessary to ensure the health of the business.
Macy’s Also Closing Stores in Effort to Boost Sales
Kohl’s is not alone in its efforts to streamline operations. On Thursday, Macy’s revealed it will close 66 underperforming stores, including one in a historic Philadelphia landmark. These closures are part of a broader strategy to shutter 150 stores by 2026, while upgrading the remaining 350 locations. Macy’s has been facing similar struggles, with falling profits and sales in its most recent fiscal quarter. Despite raising its sales expectations for the current fiscal year, Macy’s also lowered its profit projections.
Macy’s closures account for 25% of its overall square footage, though they contribute to less than 10% of its sales.
A Shift in Consumer Behavior
Both Kohl’s and Macy’s are grappling with changing consumer behavior, as shoppers increasingly seek out deals online and spend less on discretionary items due to ongoing inflation. As these department stores attempt to regain their footing, the focus is on adapting to evolving shopping trends and managing costs to stay competitive in a challenging retail environment.
