Kohl’s Navigates Store Closures and Leadership Shifts Amid Retail Struggles

Green "Sorry, We're Closed" sign hanging in window.

Kohl’s Corporation announces the closure of 27 stores and a distribution center, signaling a significant shift in retail strategy amid ongoing challenges.

At a Glance

  • Kohl’s to close 27 underperforming stores across 15 states by April 2025.
  • CEO Tom Kingsbury stepping down, to be replaced by former Michaels CEO Ashley Buchanan.
  • Closures part of efforts to boost profitability after 11 consecutive quarters of sales declines.
  • E-commerce fulfillment center in San Bernardino, California, also set to close in May 2025.
  • Company expects a 7% to 8% decline in sales for 2024.

Kohl’s Implements Strategic Store Closures

Kohl’s Corporation, headquartered in Menomonee Falls, Wisconsin, has announced the closure of 27 underperforming stores across 15 states by April 2025. This decision comes as part of the company’s efforts to address declining sales and boost profitability in a challenging retail environment. The closures will affect locations in various states, including Alabama, California, and Oregon, with 10 stores in California alone set to shut down.

In addition to the store closures, Kohl’s will also shut down an e-commerce fulfillment center in San Bernardino, California, in May 2025. The company plans to shift fulfillment operations to store locations, potentially streamlining its distribution process. These moves are part of Kohl’s long-term growth strategy aimed at supporting the business’s health and future in an evolving retail landscape.

Leadership Changes at the Helm

Alongside the operational changes, Kohl’s is undergoing a significant leadership transition. CEO Tom Kingsbury will be stepping down from his position, to be succeeded by Ashley Buchanan, the former CEO of Michaels. This change in leadership comes at a critical time for the company as it navigates through challenging market conditions.

“As we continue to build on our long-term growth strategy, it is important that we also take difficult but necessary actions to support the health and future of our business for our customers and our teams,” said Kingsbury.

Kingsbury will remain as an adviser and board member until his retirement in May 2025, ensuring a smooth transition of leadership. This change marks a new chapter for Kohl’s as it seeks to reinvent its business model and adapt to changing consumer behaviors.

Impact on Employees and Future Outlook

While Kohl’s has not disclosed the exact number of employees affected by the closures, the company has stated that all impacted associates have been informed and offered support. “All associates have been informed, and offered a competitive severance package or the ability to apply to other open roles at Kohl’s,” company officials stated.

Despite the closures, Kohl’s remains confident in the strength of its profitable store base. After the closures, the company will still operate more than 1,120 locations across the United States, excluding Hawaii. However, Kohl’s expects a 7% to 8% decline in sales for 2024, with full-year sales to be reported in February.

In an effort to counteract declining sales in other categories, Kohl’s has introduced Babies R Us shops in 200 stores. This strategic move demonstrates the company’s adaptability and willingness to explore new avenues for growth amid changing market dynamics.

Broader Retail Industry Challenges

Kohl’s is not alone in facing challenges in the U.S. department store sector. Macy’s recently announced plans to close 66 stores early this year as part of a larger strategy to shutter 150 underperforming locations by fiscal 2026. These industry-wide trends reflect the ongoing shift in consumer behavior towards online shopping and the need for traditional retailers to adapt their business models.

As Kohl’s navigates these changes, the company’s focus on operational efficiency and adapting to new market realities will be crucial in determining its future success in the competitive retail landscape.

Sources:

  1. Kohl’s to close 27 stores by April as struggling department stores works to improve sales
  2. Kohl’s to close 27 ‘underperforming’ stores by April. Here’s the list
  3. Kohl’s to Close 27 ‘Underperforming’ Stores by April, CEO Stepping Down