Kohl’s Corp., seeking a new perspective on how to turn around the company and facing an expected challenging holiday season, has named Ashley Buchanan of Michaels Cos. as its new chief executive officer, effective January 15.
At that time, the current CEO, Tom Kingsbury, will step down from the role.
Buchanan is currently CEO of Michaels Cos., where he has worked since 2020. Prior to that, he held a variety of senior executive positions at Walmart and Sam’s Club during his 13 years at the company.
Kingsbury will stay on at Kohl’s in an advisory role to the new CEO and retain his position on Kohl’s board of directors through his retirement in May 2025, when the size of the board will be reduced by one.
Ashley Buchanan
Courtesy image
“The board is very grateful for Tom’s leadership and ongoing service to Kohl’s,” board chair Michael Bender said in a statement released Monday afternoon. “Tom joined our board in 2021. He then stepped up as interim CEO in 2022 and agreed to take the permanent position as CEO through May 2025. Under his leadership, the company is undergoing a transformation to elevate its product portfolio, enhance the store experience and improve its long-term financial health and profitability. On behalf of all Kohl’s associates, we thank Tom for his leadership, for his role working with the board on our CEO search, and for supporting Ashley through this transition.”
Bender said that Buchanan’s “vast” retail experience leading operations, merchandising, and e-commerce at Walmart and his past five years as CEO of Michaels will bring “a steady, proven, innovative leader to Kohl’s as we continue to transform the business and drive future growth.”
Bender credited Buchanan with improving Michaels’ profitability and cash flow while driving operational efficiencies there. Bender also said that Buchanan introduced new ways to leverage technology and e-commerce allowing Michaels to more effectively connect with customers.
“He has driven change by setting a clear vision, empowering teams, and practicing organizational accountability for results. We know he will be a great leader for Kohl’s and will bring a new perspective in our next chapter,” Bender said.
Tom Kingsbury
Courtesy
In his own statement, Kingsbury said, “I’ve loved working in the retail industry for more than 40 years and it’s been an honor to finish my career at Kohl’s, a company that I’ve known and loved since I was a kid in Wisconsin. I’m proud of what the team has accomplished with our focus on enhancing the customer experience, driving value for customers, and running a sound and profitable business. I am optimistic for what is ahead for Kohl’s associates, customers and shareholders.”
Buchanan characterized Kohl’s as “a storied and respected brand in the retail industry…We have the privilege of serving millions of families all across the country, and I’m excited to work with the teams to evolve our business – building off the strength of our brand and loyal customer base while also creating a compelling retail experience for the future.”
At Michael’s, Buchanan is also credited with enhancing Michael’s store base with a smaller format model, and simplifying its merchandise strategy. During his tenure at Walmart, he served as chief merchandising and chief operating officer for Walmart U.S. e-commerce. Before that, he was chief merchant at Sam’s Club, where he led merchandising strategy, private brands, pricing, global sourcing, packaging and supply chain. Buchanan joined Walmart from Dell, where he held positions in finance. He also worked at Accenture, where he focused on the retail industry.
Kohl’s revealed its CEO transition just one day ahead of its third quarter earnings results scheduled to be released at 9 a.m Tuesday.
Kohl’s Corp. is striving to reverse negative sales trends and emphasize its positioning as a family destination this holiday season. The Menomonee Falls, Wis.-based promotional retailer has beefed up its 2024 holiday assortment with nearly twice as many gift options compared to last year, according to senior executives who recently discussed the strategy with WWD.
Kohl’s stores are set to have twice as many Sephora at Kohl’s gift sets as a year ago. Babies R Us shops have been set up in 200 locations for the first time this holiday, providing a new assortment of baby gear. And seasonal decor has been expanded by 50 percent and has front-of-store positioning. There is also a greater emphasis on building momentum in growth areas such as Sephora and dresses.
Elsewhere on the selling floor, Kohl’s is introducing a number of brands to its customers for the holidays, including Aéropostale, Hurley, Quiksilver, Limited Too, Tahari, Catherine Malandrino and Buffalo.
Kohl’s has also stocked 50 percent more holiday cards, and shoppers will find a deeper selection of pet, tech and electronics, personal care and wellness, kitchen electrics and novelty gifts.
Kohl’s merchandise changes under the leadership of Kingsbury and his predecessor Michelle Gass, who is now running Levi Strauss, did not yield the kind of results that management and the board had expected. Inflation and distracting hostile investor activity are partly to blame. For the second quarter ended May 4, Kohl’s suffered a net loss of $27 million, compared to net income of $14 million in the prior-year period. Operating income fell to $43 million from $98 million in the year-ago period. Net sales in Q2 decreased 5.3 percent to $3.18 billion from $3.36 billion in the year-ago period and comparable sales decreased 4.4 percent.
“As Kohl’s grapples to maintain its relevance in the retail market, it has opted to shuffle its leadership team yet again,” said Neil Saunders, managing director of GlobalData. “Given the consistently weak performance this is hardly surprising. However, changing the faces at the top table provides, in and of itself, no guarantee of success.
“The net result has been a continued decline in market share and the loss of an extensive number of customers. Deep problems remain in terms of merchandising, assortments, and the general proposition. It will now fall to new CEO Ashley Buchanan to resolve these issues. And while he brings some good operational experience, we are somewhat concerned that he does not have deeper expertise in fashion – which is the main arena where Kohl’s needs to course correct. That said, he will bring some fresh thinking which is desperately needed.”
