Disgruntled activist investors of Menomonee Falls-based Kohl’s Corp. made a lot of noise during the past two years, complaining about the company’s performance and its low stock price, demanding changes in leadership and in the direction of the company.
Well, now they’re getting their wish. Kohl’s chief executive officer Michelle Gass will leave the company on Dec. 2 to become president of San Francisco-based Levi Strauss & Co.
She’s the latest Kohl’s exec to leave the company. Earlier this year, chief merchandising officer Doug Howe, chief marketing officer Greg Revelle and chief technology officer Paul Gaffney also left.
Gass has been the CEO of Kohl’s since 2018. She’s led the company during a tumultuous time in the retail industry. Online retail, led by Amazon, has shaken up the industry, leading to the closure of many brick-and-mortar stores and numerous retailers going out of business.
Plus, the COVID-19 pandemic forced brick-and-mortar retail stores to temporarily shut their doors, causing a huge loss of sales in 2020.
But Kohl’s has weathered the storm better than most. Its store count has remained steady during the past decade. The company had pre-pandemic revenues of about $20 billion, which slipped to $16 billion during 2020 but then recovered to $19.4 billion in 2021.
The company reported net income of $801 million in 2018, Gass’ first year at the helm. That fell to $691 million in 2019 and then the company lost $163 million in 2020 due to the pandemic. Then it bounced back in 2021 with total revenue of $938 million.
But Kohl’s activist investor groups have said the company should be performing at a higher level. They’re no doubt unhappy that the company’s stock price, which was above $60 a share when Gass became CEO and peaked at above $80 later that year, is now considerably lower, sinking as low as $25 this year.
Last year, activist investors pushed for a shakeup of the Kohl’s board seeking new members with more retail industry experience. A settlement was reached, and three new board members were added, including Tom Kingsbury, who will be interim CEO until a successor to Gass is named.
Some activist investors wanted to see the company sold, and Kohl’s earlier this year entered into exclusive negotiations with Ohio-based Franchise Group Inc.; the negotiations ended without a sale.
It always seemed clear that Kohl’s leadership had no desire to sell the company and wanted to stick to their turnaround plans for the company, which included the addition of Sephora beauty stores within Kohl’s stores.
Gass remained under fire from activist investors, and you can’t blame her for taking an opportunity for a fresh start elsewhere.
So now one of southeastern Wisconsin’s largest, most important and most philanthropic companies will get a new leader who could take it in a new direction. A lot is at stake, not only for the future of the company, but also the region’s economy.