Inside The Rise And Fall Of Kohl's
Kohl's, once a retail darling, experienced a dramatic decline from an $82 stock peak in 2018 to under $20, primarily due to loss of brand identity and customer focus. New CEO Michael Bender has implemented a turnaround strategy focused on returning to core values, resulting in recent positive performance metrics and a 120% stock jump over the past year.
Summary
Kohl's department store opened in Wisconsin in 1962 and became a retail success story by serving middle America with proprietary brands and value-focused positioning. The company reached its peak around late 2018 when its stock hit approximately $82 per share, competing alongside other major retailers like Macy's and Bloomingdale's. However, over the following years, the company experienced rapid executive turnover, declining foot traffic and sales, increased competition, and a subsequent 70% stock decline over five years, dropping to under $20 per share.
Analysts identified the core problem: Kohl's lost its identity and core customer base by attempting to transform itself into an off-price retailer rather than a department store. The company made strategic missteps including discontinuing entire categories like petites and jewelry, attempting to shake up assortments, and reining in coupons—moves that alienated its traditional customer base. CEO Michael Bender acknowledged that the company had stopped listening to customers and made decisions that removed non-substitutable product categories.
The broader retail environment also pressured department stores serving middle-income consumers, with soaring gas prices, rising inflation, and political uncertainty creating economic headwinds that particularly impacted the lower to middle-income consumer segment. Since Bender became permanent CEO in late 2025, he has focused on a turnaround strategy centered on understanding customers, strengthening the balance sheet, ensuring value, and committing to a focused strategic direction. Early results show promise: the stock has jumped approximately 120% over the past year, and Kohl's reported its best comparable sales growth in four years in its first quarter earnings, despite declining overall revenue. Bender frames the turnaround as being in early innings and emphasizes that achieving growth is essential for the business moving forward.
Key Insights
- Kohl's attempted to transform itself into an off-price retailer instead of maintaining its department store identity, which directly alienated its existing customer base
- The company made irreversible category decisions by eliminating petites and jewelry, which are non-substitutable categories that customers cannot easily find elsewhere
- Department stores catering to lower to middle-income consumers experienced the most disruption during recent periods of soaring gas prices, rising inflation, and political uncertainty
- CEO Michael Bender attributed Kohl's decline to the organization stopping listening to customers and making decisions that removed core product categories
- Kohl's reported best comparable sales growth in four years in Q1 earnings despite declining overall revenue, suggesting the turnaround strategy is beginning to work
Topics
Transcript
[0:00] Kohl's was once one of the most beloved department stores in the country. Now, [music] that picture looks a lot different. >> Whether they're getting into athletic and athleisure, or they're doubling down on fashion, or now they're going private label, and it's [music] been this kind of constant kind of shift of what the customer can expect when they walk into the store. I think that's caused some confusion. >> [music] >> The first Kohl's department store opened in Wisconsin in 1962. [0:31] 30 years later, the company made its IPO with 76 stores across the Midwest. Kohl's built its brand on serving middle America with a strong portfolio of proprietary brands and an emphasis on value. At…
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