Kohl's CEO steps down; takes president role at Levi Strauss
Michelle Gass, Kohl’s CEO
NEW YORK - Michelle Gass, CEO of department store chain Kohl's, is stepping down from her role early next month and will become the president of denim giant Levi Strauss & Co.
Levi's said Tuesday in a release that Gass will start on Jan. 2, and the board of directors has put in motion a succession plan for her to succeed Chip Bergh as president and CEO in the next 18 months. She is expected to join the board of directors on that date. Gass, who joined Kohl's in June 2013 as chief merchandising and customer officer, became CEO in May 2018.
Bergh joined Levi Strauss's helm in September 2011, having served in top roles at Procter & Gamble during his 21-year tenure.
Kohl's said in a separate release that Gass plans to step down on Dec. 2 and Tom Kingsbury, a board director, will serve as interim CEO.
The moves come as Kohl's have been under pressure by activist investors to shake up management amid weak sales.
Kohl’s announced preliminary figures for its third-quarter period. It said that same-store sales will be down 6.9%, while net sales will be down 7.2 % compared to the year-ago period. The company is expected to release its results on Nov. 17.
Kohl's
Kohl’s struggled with anemic sales before the pandemic. Sales and profits rebounded in 2021, but the department store is now battling higher costs and a pullback from its price-conscious shoppers who are being more cautious with their spending in the face of rising prices for gas, food, and just about everything else.
In July, Kohl's called off buyout talks with Franchise Group, the owner of Vitamin Shoppe, citing economic conditions.
In August, the Menomonee, Wisconsin, chain slashed its sales and profit expectations for the year after being forced to cut prices to shed unwanted merchandise. The department store also cut back on orders ahead of the critical holiday period.
Michelle Gass, Kohl’s CEO
"It is unsurprising that Michelle Gass is to relinquish her role as CEO," said Neil Saunders, managing director at GlobalData Retail, in a report published on Tuesday. "This will be seen as a sacrificial offering to investors, who have long pushed for widespread change in the management suite."
But Saunders said that despite presiding over sales declines, Gass did improve fashion assortments and helped oversee a key partnership with Sephora, which is rolling out shops at Kohl's stores. That partnership has attracted younger shoppers who are buying other items at the store. She also oversaw the partnership with Amazon where customers can return items purchased at the online retailer at its store locations. So Saunders believes her legacy should be "viewed favorably."
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Saunders, however, added that Kohl's needs to find a permanent replacement as quick as possible as retailers face a challenging year.
Ancora owns 2.5% of outstanding shares in Kohl's and had pushed for the removal of Gass and Chairman Peter Boneparth. It said Tuesday it was pleased that Kohl's had nominated retail sector veteran Kingsbury, nominated by its shareholder group in 2021, as its interim CEO. Its other board nominee Margaret Jenkins will be part of the new committee tasked with identifying the right permanent leader for the business, Ancora said.
"Ancora has been a long-term shareholder of Kohl’s and believes that under the right leadership, the company can be a source of tremendous value for investors, customers, suppliers and employees, " said Fredrick D. DiSanto, chairman and CEO of Ancora, and James Chadwick, president of Ancora Alternatives LLC.
Shares of Kohl's gained more than 8%, or $2.25, to $29.10 in morning trading, while shares of Levi's lost more than 1%, or 21 cents, to $15.13.