Can a company leader really make a difference? Especially in retailing? Well, recent history has shown us that is an absolute truism. Doug McMillon at Walmart, Brian Cornell – at least in his early days at Target – Mary Dillon at Ulta, Hubert Joly at Best Buy, and Fran Horowitz at Abercrombie and Fitch all made their companies better, more successful and more profitable.
Kingsbury benefited from some low-hanging fruit but now the new CEO has to fix what’s really dysfunctional at Kohl’s. In a déjà vu moment, the problems are similar to what Buchanan had to deal with when he got to Michaels.
Add to that list Ashley Buchanan, the new CEO of Kohl’s who joins the retailer after a four-year stint at Michaels, the 1,300-unit crafts chain. Can he pull off a similar retail turnaround at Kohl’s? Although Michaels is private and we don’t know the exact financial results of his work, he made a significant number of improvements in its merchandising, operations and ecommerce capabilities that made the retailer successful.
New Boss, not the Same Old Boss
Ashley Buchanan comes into Kohl’s, taking over for Tom Kingsbury who is retiring, with a daunting task. In my interview with Buchanan in 2021, he spoke about the conditions at Michaels when he got there, and they sound remarkably similar to what he is about to encounter at Kohl’s. But Kohl’s problems are at a magnitude of multiple times more complex. As a public company, Kohl’s has been the target of aggressive investors and Ashley Buchanan’s window to fix Kohl’s is narrower and bound to be harder, especially with some of those pesky investors now on the retailer’s board.
Kingsbury’s abrupt departure – it came the day before the retailer issued yet another series of dismal financial results – is oxymoronic, both a surprise and overdue. He was never the long-term solution for Kohl’s and was brought in as a short-term caretaker bridge to try to stabilize things after a particularly rough stretch for the company under CEO Michelle Gass.
He did take some positive steps, rescuing the Sephora business from its former outpost at JC Penney, aligning with Babies’R’Us for in-store shops, putting a renewed focus on what was once a strong home business for Kohl’s, and cleaning up the merchandising assortment. But he was never able to move the financial needle enough and its core apparel and footwear business continued to struggle. His solid track record at previous stops at Burlington and May Co. may have had a few blemishes but he was viewed to be walking into a no-win situation at Kohl’s with few easy answers. But, hey, who doesn’t like a challenge?
Different…and Sort of the Same
For Buchanan, it may be even harder. Kingsbury benefited from some low-hanging fruit but now the new CEO has to fix what’s really dysfunctional at Kohl’s. In a déjà vu moment, the problems are similar to what he had to deal with when he got to Michaels. Shortly after he took the helm of Michaels, he told me in an interview in October 2021, “When I took the job, I talked to hundreds of our customers and what they told me was they loved the brand, but they wanted to know why we made it so difficult to shop at Michaels.”
He said he was struck by the poor merchandising at Michaels. “I took a look at Michaels and found cluttered stores, back rooms that were so packed you couldn’t move and really no strategy. Our customers had been seeing the same product for at least three years and there was no newness.”
A veteran of Walmart where he first was a chief merchant for the Sam’s Club division and then head of the entire company’s ecommerce efforts (pre-Marc Lore), he instinctively knew what had to be done at Michaels and how fast it had to happen. After less than two years on the job, he said, “We did ten years in one year. But we’re just in the third inning of a nine-inning game. We’ve flipped the brand.” So far, so good. Now onto Kohl’s which has the same sense of urgency.
At Kohl’s, many of the problems – specifically merchandising of its foundation product classifications and what is considered a sub-par ecommerce business – will be similar to what he faced at Michaels. But the added challenge for him is that he hasn’t had direct control of fashion categories like apparel, footwear and accessories, all of which would seem to need some serious reworking. In Kohl’s heyday, they were the strength of the store, particularly for young families with kids and this will need to be substantially reworked. It won’t be easy with Target and even Walmart attacking from below and fast fashion chains like H&M and Zara continuing to move much more quickly than legacy retailers have been able to.
What Ashley Buchanan Brings
Buchanan has been credited with successfully addressing Michaels’ weaknesses, including its underdeveloped ecommerce business when he used existing stores as distribution points, something that hadn’t been done under previous management. He also launched a Pro division that offered the retailer’s products in bulk for resale, and at the time of the interview, he said it accounted for 40 percent of its overall volume. He also focused more on the maker and craftsperson sector.
Rich McMahon, one-time Bed Bath & Beyond chief strategy officer during its glory days and now CEO of consulting company CDA Ventures, is enthusiastic about Buchanan in a LinkedIn post. “As Buchanan steps into his role at Kohl’s, he brings with him a wealth of experience in digital transformation and merchandising strategy. His success at Michaels in improving operational efficiencies and enhancing customer engagement will be crucial for Kohl’s, which has struggled with declining sales and increased competition. By leveraging his expertise in ecommerce and customer-centric strategies, Buchanan has the potential to revitalize Kohl’s retail experience and drive growth.”
Make no mistake about it: Kohl’s and Michaels are very different retailers with many problems specific to each. But Ashley Buchanan’s resume and his track record have to offer encouragement to his new company. If he can do for Kohl’s what he did at Michaels, things will indeed be looking up in Menomonee Falls.
