It looks more like evolution than revolution at Kohl’s Corp. as Michelle Gass prepares to take the top job at Kohl’s Corp. from longtime chief executive officer Kevin Mansell.
Gass, 49, will step in as ceo after Kohl’s annual meeting in May, when Mansell will retire as president, ceo and chairman after a 35-year run at the company.
The appointment, which was long expected, makes Gass one of the highest-profile female executives in retail, where most of the leaders are still men. And she’ll have some backup in the c-suite. Sona Chawla, 50, Kohl’s chief operating officer, will take on the role of president. The board plans to appoint one of the company’s independent directors as chairman.
“I am energized by the challenges we are all facing today in the retail sector,” Gass said. “We are resilient, innovative and agile, and will continue to make investments in our business to provide compelling customer experiences that pave the path for our future success.”
Gass joined Kohl’s in 2013 as chief customer officer overseeing marketing and e-commerce and in 2015 became chief merchandising and customer officer, adding the company’s merchandising, planning and product development divisions to her responsibilities.
Before joining Kohl’s, Gass spent almost 17 years at Starbucks.
Kirk Palmer, founder of executive search firm Kirk Palmer Associates, said Gass has an “outstanding reputation” and “took the time to immerse herself and understand the merchandising part of the business.”
Palmer said it was a “good move for Kohl’s to have an internal candidate ready and I believe she will be an energizing force within the business.”
Like most of the rest of retail, Kohl’s has been struggling as consumers change their shopping habits and rely more on the web. The retailer’s sales fell 2.7 percent last year as adjusted profits declined 13.8 percent to $673 million, but there are hopes that the company could hold up better than its more mall-based competitors.
And Kohl’s has shown its willingness to take a new approach — and an if-you-can’t-beat-them-join-them attitude toward Amazon. Last week the retailer said a total of 82 of its stores in the Chicago and Los Angeles markets would offer free, convenient returns of Amazon products beginning next month. The company also this month laid out a new smart home experience with Amazon that will be introduced in 10 doors.
Jefferies analyst Randal Konik applauded the promotions, which he said were expected and would hold on to both Gass’ and Chawla’s “deep expertise in the omnichannel strategies that will be necessary to drive Kohl’s next leg of growth.”
Konik said he was impressed, particularly by “merchandising efforts under Ms. Gass’s direction, most notably the recent partnership with Amazon, which we view as a smart strategic decision.”
The analyst suggested that it was the Kohl’s “story” that mattered to investors.
“We see Kohl’s as a share gainer, as initiatives to drive traffic appear to be taking hold, including positive transactions in the month of July (an anomaly in the retail world),” Konik said. “We believe the combination of enhanced marketing initiatives and the addition of new brands are helping attract a new customer base.”
Gass is already responsible for a big part of the company’s current strategy. Mark Altschwager, a retail analyst at Robert W. Baird & Co., said, “We would expect a smooth leadership transition and continuation of the current strategy” under Gass.
Mansell added: “Michelle has been an instrumental leader in shaping the future at Kohl’s — one where we continue to put the customer first, focus on innovation, speed and agility and remain dedicated to the long-term financial health of the business. Michelle’s leadership of our merchandise and marketing organizations has proven her talent, passion, vision and readiness to lead our organization.
“She was a key leader driving the creation of our long-term strategic framework, the Greatness Agenda, led our focus on becoming the active and wellness destination for families, launched our new loyalty program, and is responsible for bringing in new categories, partners and brands including the company’s launch of Under Armour earlier this year and our recently announced collaborations with Amazon,” the outgoing ceo said. “The retail industry is going through a transformational amount of change and Michelle is extremely well-qualified and positioned to lead Kohl’s through this evolution.”
Mansell helped grow Kohl’s from a local Milwaukee retailer with a dozen stores to a national powerhouse. He succeed Larry Montgomery as ceo in 2008, shepherded the company through the Great Recession and set it on an omnichannel path with a $3 billion e-commerce business.
Investors, who are often skittish in the face of any change, pushed Kohl’s stock down for much of the day on Tuesday, but the stock strengthened in afternoon trading and closed up 0.1 percent to $46.27.