• by Sarah Mahoney  @mahoney_sarah, October 19, 2023

Kohl’s, which has long struggled to find a way to reignite sales, is unveiling holiday merchandising plans. They include plenty of ways for shoppers to save money, as the retailer leans into an all-new Gift Shop approach in the front of stores, an expanded assortment of home decor, most under $30, and a stepped-up Sephora selection.

"We know customers are looking for the right gift at the perfect value this holiday,” said Christie Raymond, Kohl's chief marketing officer, in the announcement. “Kohl’s will offer a season full of incredible deals, a broad assortment of gifts for everyone on their list, and an inspiring experience.”

Kohl’s promoted Raymond to CMO last year, a tumultuous 2022 that included the departure of former CEO Michelle Gass to Levi’s and a proxy fight as activist investors tried (and failed) to oust executives.

Sephora, now in more than 900 stores, continues to be a bright spot for the midline department store.

In the most recent quarterly results, the Menomonee Falls, Wisconsin-based company reported a 4.8% decline in sales to $3.7 billion. And net income sank to $58 million, compared to net income of $143 million in the comparable period of 2022.

Some observers doubt Kohl’s can pull off its ambitious transformation plan. Unlike many of the company’s competitors, Kohl’s sales are lower today than ten years ago, writes David Swartz, an analyst who follows the company for Morningstar.

“We think its competitors, such as wide-moat Amazon and other ecommerce, discount, and specialty retailers, will continue to siphon apparel sales from it and other department stores,” he says. While acknowledging Kohl’s strengths, which include an impressive loyalty membership of 30 million and few stores in struggling mall locations, Swartz believes store visitation is declining. “Sales per square foot have been stagnant since 2010 despite an increase in annual ecommerce from about $700 million in 2010 to $5.5 billion in 2022,” he says. “We believe Kohl’s large fleet of big-box stores is unnecessary in an increasingly fragmented market.”