This Popular Department Store Lost Its Edge. Now It’s Betting Big on a Comeback.

Kohl’s is trying to make a comeback following years of tepid sales. The popular department store is retargeting the middle-income shopper who drove most of its sales by offering a tighter selection, better value and a more seamless store-to-digital experience to turn stagnant traffic into growth. 

CNBC reports that for much of the 2000s, Kohl’s found its niche as a suburban location built on coupons, rewards and a reliable in-store experience. As shoppers moved online and new competitors crowded the market, Kohl’s lost its footing. 

Kohl’s CEO Michael Bender is open about missteps. “We stopped listening to the customer,” he said in an interview with CNBC earlier this month. He said that Kohl’s lost its identity and its core customer somewhere along the way. In practice, that meant the department store downsized categories that longtime shoppers relied on, including petites and fine jewelry, and let stores grow cluttered and inconsistent. 

Kohl’s core shopper is a lower- to middle-income family closely monitoring their finances. Bender said in a prior interview with CNBC last month. “There are families sitting around their kitchen tables right now, trying to navigate life, especially against the backdrop of rising energy costs and labor market issues,” he said. 

These households have grown more picky by trading down, delaying purchases or skipping shopping trips altogether. “Customers show a lot of excitement, but they’re more selective and thoughtful about their spending,” Bender said, adding that Kohl’s has to “increasingly focus on delivering value.”

The new playbook

The first step of Kohl’s comeback is a more disciplined assortment of items. Bender said last month that the company is “doubling down” on a more curated selection of items and cutting redundant choices from brands.  

Kohl’s is also expanding fine jewelry to 350 additional stores and launching new fashion and hair accessories under its proprietary SO brand, he added.

The second pillar is restoring Kohl’s reputation as a value and quality leader rather than just another promotion‑heavy department store. The latest quarter shows that discipline is starting to pay off: last month, Kohl’s reported a 1.7% decline in net sales and a 1.1% drop in comparable sales in its fiscal first quarter, but that marked its best performance in four years and sent the stock up about 20% in a single day.

The third element of the turnaround plan is a frictionless experience that makes shopping feel easy, whether customers start on their phones or in a store aisle. 

Bender noted last month that the reinvention was still in its early stages and that the company is “not satisfied” with its current position, especially after categories like Sephora at Kohl’s and footwear underperformed in the most recent quarter. 

Yet Bender insists that the trajectory is changing. “I think ultimately for us, it’s about getting back to growth, plain and simple,” he said last month, noting that the chain is “knocking on the door of growth” and that a full turnaround is “right around the corner.”