Interim CEO Michael Bender signaled plans to get "back to growth" after a surprise leadership change and modest earnings improvement. Cost reductions and tighter inventory have improved margins and provided financial breathing room, but those measures can suppress sales, create empty shelves, and degrade in-store experience through leaner staffing and longer checkout waits. Rival retailers have capitalized on Kohl's weakness, driving customer losses and steep category declines; only Sephora shop sales avoided double-digit drops last year. Kohl's customer base and revenue remain substantially reduced—about 20% smaller—making any turnaround complex despite recent stock gains and investor optimism.
Good morning. I've covered retail for more than 15 years now, so if there's one thing I'm familiar with, it's a once-beloved retailer trying for the umpteenth time to mount a turnaround. It can be done-see Walmart in the last decade and Target in the second half of the 2010s. But as I've been seeing at Kohl's (No. 261 on the Fortune 500)-it's extremely difficult.
Investors were practically giddy yesterday when Kohl's surfaced some glimmers of good news in its second-quarter earnings call. The stock is up 21% over the last few days. Interim CEO Michael Bender, a Kohl's director who took the reins in May after the previous CEO's surprise ouster, laid out his plans to get "back to growth." But there are still many reasons to be cautious-and three big reasons these types of turnarounds are so challenging.
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