As one major retail chief executive officer, J.C. Penney Inc.’s Myron “Mike” Ullman 3rd, may be feeling less pressure, another one — Kohl’s Kevin Mansell — could be the next on the hot seat.
This story first appeared in the August 15, 2013 issue of WWD. Subscribe Today.
Kohl’s has been struggling for the last few years even as Penney’s has stumbled, and its second-quarter results, due today, will be key in signaling whether a turnaround is under way or more difficulties lie ahead. Kohl’s is expected to report earnings per share of $1.05, up from $1.00 a year ago, on revenues of $4.3 billion.
As with Ullman at Penney’s, there have been rumblings that Mansell might be on thin ice at Kohl’s — speculation that a spokeswoman vehemently denied to WWD on Wednesday. “There is absolutely no truth to that whatsoever,” she said.
Still, the retailer’s board has expressed its displeasure at the company’s performance. Kohl’s net profits fell 15.5 percent to $986 million last year as sales inched up 2.5 percent to $19.28 billion.
For the first quarter ended May 4, Kohl’s earnings declined 4.5 percent to $147 million from $154 million. Sales for the quarter declined 1 percent to $4.2 billion from $4.24 billion. Mansell attributed the first-quarter sales decline to cold weather, which slowed sales of seasonal merchandise. On the call, Mansell said Kohl’s was investing in information technology to offer customers a full multichannel shopping experience.
As reported in March, the compensation committee of Kohl’s board cut Mansell’s compensation, as well as that of two other top Kohl’s executives, as a result of the poor results. Mansell’s total compensation last year fell 17 percent to $7.8 million and included a salary of $1.3 million and incentive pay of $531,720. He also received stock and options awards from prior years valued at $5.6 million.
“Because the company failed to achieve acceptable financial results in 2012, our principal officers did not achieve a ‘satisfactory’ rating for the year and therefore did not receive any stock options, restricted shares or any other form of equity awards in 2013 based on 2012 performance,” according to Kohl’s proxy statement filed with the Securities and Exchange Commission in March. Others who got their compensation reduced at Kohl’s were Donald Brennan, chief merchandising officer, and John Worthington, chief administrative officer, who resigned from the company in May. Both Brennan and Worthington saw their total compensation fall by just more than 71 percent to $3 million.
“From a financial results perspective, fiscal 2012 was a disappointing year for our company,” Kohl’s said in the proxy. “While sales grew for the year in total…there were a number of categories within which we did not grow at the rate we had planned. Just as importantly, our growth came at a higher cost to profitability than is acceptable to us.”
Kohl’s, which markets such brands as Candies, Rock & Republic, Chaps, Simply Vera Vera Wang, LC Lauren Conrad, Jennifer Lopez and Dana Buchman, has had a tremendous opportunity to capture market share from Penney’s, which has been struggling the past few years, but that hasn’t happened.
Mansell, who has been with Kohl’s for more than 30 years, became ceo in August 2008. Before that he was president of Kohl’s Corp. and Kohl’s Department Stores Inc. Earlier he served as executive vice president and general merchandise manager, having joined the retailer in 1982. He began his career in 1975 at the Venture Store division of May Department Stores.