Tom Kingsbury’s Kohl’s Conundrum: Finding Life after Coupons, Cash and Barbarians at the Gates

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Tom Kingsbury probably has as good a reputation as anybody in the retail business. Ask those who have worked for him, done business with him or followed his career and they generally have positive things to say. And Kingsbury’s achievements in turning around Burlington — the off-price player that was a perennial underperformer but became a profitable — are universally admired.

Now as the CEO of Kohl’s, he will need every bit of those skills, good will and perhaps some luck of the draw to turn around what is one of the more troubled companies in all of retailing. Once a wonderkid in the business that reinvented the very idea of what used to be called “a junior department store,” Kohl’s expanded from its upper Midwest base to become a national chain. With more than 1,000 stores it had a place in the moderate marketplace that took out competitors – Mervyn’s, most prominently – and also took market share, from stores like Macy’s, JCPenney, Belk and Gap — just to name a few.

Storm Clouds

Then, came the perfect storm. The mid-market became squeezed from both socioeconomic demographics and aggressive counter-retailing from players like Target, H&M, Zara, and others. A series of merchandising miscues gave it a muddled image while its growing dependency on promotional gimmicks galore hit its bottom line with a vengeance. And then it became the whipping post from outside investors who prey on weakness and made all kinds of outlandish proposals from breaking up the company, throwing out management and even selling the whole thing. They never got that far, but back a few years ago when money was cheap there certainly would have been someone out there with a checkbook and high hopes.

Kingsbury needs to look to Target and Walmart to learn how they turned their free-standing and strip center locations to their advantage with curbside pick-up and returns and other drive-up services. Offering to take back Amazon returns is a nice service, but it would be even better to take them back in the parking lot or designated outdoor area where customers never have to get out of their cars.

Kohl’s endured through it all. And while it cost then-CEO Michelle Gass her job (she got out of town while the getting was good), the company stayed in one piece even as its share price took a beating on Wall Street, losing more than half its value during 2022 and falling so far from grace from its 2018 high of more than $80 a share. At the end of March 2023, it was trading at a few cents over $23.

Enter Kingsbury. A long-time May Co. veteran, he joined Burlington in 2008 and was CEO for 11 years, remaking what had always been an also-ran in the off-price channel into a solid, profitable company. He had already been on the Kohl’s board for several years when he took on the role of interim president in December last year and then got the job permanently three months later. After he moved into the corner office in Menomonee Falls, WI, it’s only logical to ask if Kingsbury can do it again: Can he turn around another retailer that had fallen down and couldn’t seem to get back up again? Whatever secret sauce he used at Burlington; does he have enough leftover in his hip pocket for Kohl’s?

What Tom Kingsbury Can’t Fix

To be fair, some of what Kingsbury faces in fixing Kohl’s is out of his control. In the increasing bifurcation of American society and consumer spending patterns, it is very hard to succeed in the middle. Shoppers want the bargains – or at least perceived bargains – of dollar stores, off-pricers, Amazon and the two-headed monster that is Walmart and Target at one extreme. Or they want luxury – or at least perceived luxury – of Louis Vuitton, Bloomingdale’s, and Tom Ford at the other extreme.

Being the merchant in the middle is a very tough spot to be these days and any strategy Kingsbury adapts for Kohl’s is going to have to tread that delicate balance without tipping the merchandising scales too much one way or another. Kohl’s would get killed if it tried to go head-to-head with Target – much less Walmart – and it can never trade up fast enough or furiously enough to be a true department store, à la Macy’s or Dillard’s…much less Nordstrom or Saks.

So, when it comes to what retail sandbox it plays in, Kohl’s must be content to stay in its lane, resigned to get a bigger piece of the smaller pie. (All of those mixed cliches notwithstanding.)

What Tom Kingsbury Can Fix


It’s at the very foundation of any Kohl’s fix. The retailer must be a better retailer. It needs to present a consistent branding and product selection mix to its customers. In the past, it has often veered too far off into areas where it had no business being and that needs to end. The Kohl’s customer is a casually dressed young family, generally in the early stages of that family foundation. So, the retailer needs a great kid’s basic assortment. Tops, bottoms, underwear, whatever it takes to send that kid off to school in the morning.

Same for its women’s and men’s assortments: basics, more basics and then more basics, branded if possible and perhaps with a seasonal touch of just enough fashion to drive some impulse business. This is not a trendy customer who goes going clubbing until daylight.

During the pandemic Kohl’s loaded up on at-home leisurewear and made a killing. Then it in turn got killed when the business shifted quickly to back to the office or out to dinner clothing. It can’t afford to be caught flatfooted like that again. Footwear – for all members of the family — was always a foundation of the Kohl’s assortment and that shouldn’t ever be ignored. I remember Jay Baker, back when he was Kohl’s president during its early sprint to success, saying the store needed to get the family during its early stages as loyal shoppers and footwear was a key to make that happen. Thirty years later that’s still true.

Kohl’s also needs to stabilize its home assortment. Here too it has veered back and forth between national and house brands and has rarely gotten the balance correct. In soft home its private labels are solid, but in hard goods like appliances and kitchens, that customer wants a KitchenAid stand mixer and Calphalon, nothing else will do.

One last thing on merchandising: if Michelle Gass has any legacy, it will be stealing the Sephora brand away from Penney and bringing it to Kohl’s. It was a brilliant stroke, and the brand will be the focal point of its beauty business for years to come. Kohl’s recently announced it was adding another 250 locations to its Sephora business. It needs to have them in every store. Tom: don’t ever let Sephora go.

Store Size & Footprint

Under prior management, Kohl’s tried all sorts of different configurations including smaller stores and ones with leased out grocery or fitness centers. The time to test is done. If smaller stores are the thing – and Macy’s and others believe so – then make that happen and fast. The new retail landscape is rapidly being reset and the best locations are going to the ones who get there first.

Kohl’s off-mall locations were always considered a plus and that may or may not be the case anymore in this post-pandemic era when shoppers are returning to A-class regional malls and going to mixed-use market/lifestyle centers…neither of which has Kohl’s represented.

Kingsbury needs to look to Target and Walmart to learn how they turned their free-standing and strip center locations to their advantage with curbside pick-up and returns and other drive-up services. Offering to take back Amazon returns is a nice service, but it would be even better to take them back in the parking lot or designated outdoor area where customers never have to get out of their cars.

Target is now offering curbside returns and delivery of Starbucks drinks. Is there a comparable food and beverage brand Kohl’s could hook up with in response? These services are not going away, and Kohl’s should be able to use its geography to its advantage much as it did in its early days when each store had two entrances to make it more convenient for shoppers in the often-foul weather of its Upper Midwest origins.

Operations & Inventory

Like just about every retailer in America, Kohl’s got tripped up by the supply chain chaos of the pandemic. Kingsbury has said he is making inventory management and control a priority and that’s a good thing. But not an easy one. Target, more so than just about anybody in the business, continues to learn this the hard way and Kohl’s will need to get that balance more in line with demand. And that comes back to having the right stuff to sell to begin with. It’s not rocket science…but it is a science.

Pricing & Promotion

We’ve saved the best – and the worst – for last. If Kohl’s has not been the most promotional retailer in America for the past decade, then you’d be hard pressed to find anybody else who is. Its coupon-on-top-of-coupons-on-top-of-cash are legendary, if not utterly confusing and at times somewhat lethal to its margins. But they are built into what Kohl’s is and how the consumer shops the stores. The company doesn’t need any refresher courses on how creating everyday low prices was a disaster for JCPenney under Ron Johnson more than a decade ago, decimating its business by at least 25%. Likewise, more recent efforts by Bed Bath & Beyond – another coupon-centric nameplate – to push for a simpler pricing structure is proving to be every bit as disastrous for them.

Kingsbury has talked about testing some “everyday value pricing with a small percentage of our product assortment” and assessing the results. If he’s cautious it’s with good reason and you can be sure somebody with this much retail under his belt is not going to do anything reckless. But it’s a dangerous move if consumers suddenly get it into their heads that their precious coupons and cash bonuses won’t work anymore.

Unlike Burlington where all he really needed to do was clean up the store, bring in some better goods, get rid of that stupid “coats disclaimer” (but essentially stick with the basic off-price premise), Kingsbury will be messing with the prime directive of the Kohl’s galaxy: do not interfere with my coupons.

Supermarkets and the grocery space have learned how to live with coupons and not destroy the rest of their businesses. Fast food places have mostly figured it out too. Kohl’s needs to look at those models when considering how to deploy its couponing…not JCP or BBB.

If he can do all of this, Kingsbury will have achieved a remarkable third act in his career. Some other retailers who had been given up for unfixable like Barnes & Noble, Best Buy and even Macy’s have all accomplished amazing things under the right leadership. Kohl’s, under Kingsbury, could be added to that list. Right now, the outside investors continue to hover around, ready to pounce again at the first sign of renewed weakness. And Wall Street remains unsure if he can do it. But those who know and like Tom Kingsbury think he believes he can.



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