Kohl’s Corp. chief executive officer Michelle Gass will step down from her role on Dec. 2 to “accept another opportunity,” the Menomonee Falls-based retailer announced Tuesday.
Shortly after the Kohl’s announcement, Levi Strauss & Co. said Gass has been named president of that San Francisco-based company, reporting to current president and chief executive officer Chip Bergh. Gass will be responsible for leading the Levi’s brand and the company’s global digital and commercial operations. Gass will begin her role with the company on Jan. 2 and is expected to join the Levi Strauss board of directors on her start date.
With Gass’ departure, Kohl’s board of directors has named board member Tom Kingsbury as interim CEO. He will serve in that role until a permanent successor is named. The board has also formed a CEO search committee, led by Michael Bender and including Christine Day, Margaret Jenkins, board chair Peter Boneparth and Tom Kingsbury.
“The board is grateful for Michelle’s many contributions since she joined the company in 2013. Under her leadership, the company has driven a strategic transformation, expanded its partnerships and brand portfolio, and supported an inclusive and collaborative culture. On behalf of all Kohl’s associates, we wish her well in her next endeavor,” said Boneparth.
Levi Strauss anticipates that Gass will be promoted to CEO within 18 months of her January start date, according to an SEC filing Tuesday. The company’s forthcoming employment agreement with Gass is expected to include a base salary of $1.48 million per year, with an initial target bonus of 175% of her base salary; a one-time signing bonus of $8.1 million; and two stock grants, each worth $8.1 million. In addition, Gass would be eligible for around $3 million, or two years of her base salary, in severance if she is not promoted to CEO within 18 months and decides to leave the company as a result.
Gass had a base salary of $1.47 million at Kohl’s in 2021 and total compensation of $12.9 million, according the company’s securities filings.
She joined Kohl’s Corp. in 2013 as chief customer officer and took over as CEO in May 2018 upon the retirement of Kevin Mansell, Kohl’s former chairman, chief executive officer and president.
“I am incredibly proud of what the team at Kohl’s has accomplished and I’m very confident in their ability to drive continued innovation, growth and value for customers. Kohl’s associates and brand partners are an inspiration to me, and I am truly grateful to have had the opportunity to work with this great team and company,” said Gass.
Prior to Kohl’s, Gass spent 17 years in various leadership roles at Seattle-based Starbucks Corp. During her tenure there, she oversaw Starbucks’ marketing, product and global strategy operations while the coffeehouse giant grew from 1,000 locations to 20,000 within that time frame.
During her tenure at Kohl’s, Gass led the company through numerous challenges, including retail industry headwinds, the COVID-19 pandemic and two near-board takeovers by activist investor groups. She’s credited with launching innovative partnerships, such as Amazon Returns and Sephora at Kohl’s, in an effort to bring the retailer’s 65 million-customer base through its doors. The company currently operates nearly 1,200 stores across the country, largely in suburban markets. However, another one of Gass’ growth strategies includes the launch of an additional 100 small-format locations over the next four to five years, in markets considered too small to support the typical 80,000-square-foot full-size Kohl’s store. That includes downtown Milwaukee, where Kohl’s will open a 40,000-square-foot store in fall of 2023, on the ground floor of the HUB640 building at 640 Vel R. Phillips Ave.
Kingsbury acknowledged some of the company’s recent growth efforts in a statement, saying, “Despite a challenging economic environment, Kohl’s is well positioned for long-term success with its unique off-mall store footprint, omnichannel presence, and loyal customer base. The board and I are committed to the continued refresh and innovation strategy Kohl’s has begun, the cornerstone of which is the terrific partnership we have with Sephora. I firmly believe in the long-term potential of this company, our associates and our ability to deliver value for shareholders.”
A Kohl’s board member since 2021, Kingsbury has an accomplished career in senior positions at leading retailers, including president and CEO of Burlington Stores, senior executive vice president of Kohl’s, and several management positions at The May Department Stores Company, including president and CEO of its Filene’s division. He is currently a director of Tractor Supply Company, BJ’s Wholesale Club Holdings Inc. and Big Lots Inc.
“Tom is highly regarded and perfectly equipped to take the role of interim CEO, and the board looks forward to working closely with him and the team to facilitate a smooth transition process and continue driving Kohl’s strategy,” said Boneparth.
Gass’ departure is something activist investor groups have called for over the past two years as part of efforts to shake up the company’s board room and drive additional shareholder value. Most recently, Cleveland-based wealth management firm Ancora Holdings Group LLC called for the removal of Boneparth and Gass in a Sept. 22 letter to the board. Commenting on Gass’ announced departure Tuesday, Ancora chairman and CEO Fredrick DiSanto said now is “the right time for (Kohl’s) to pivot to a leadership team with enhanced operational expertise and strong turnaround experience.”
“We are very pleased that Kohl’s will be appointing retail sector veteran Tom Kingsbury, who was nominated by our shareholder group in 2021, as its interim chief executive officer,” DiSanto added. “We are also pleased that Tom and our group’s other designee, Margaret Jenkins, will be part of the new committee tasked with identifying the right permanent leader for the business. 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.”
The market has so far responded positively to the news of Gass’ departure Tuesday, with Kohl’s stock price jumping nearly 11% to $29.70 as of 11:15 a.m.
