Inside the rise and fall of Kohl's
Kohl's, once a beloved department store chain, experienced a dramatic decline from its 2018 peak of $82 per share to under $20, losing 70% of its value over five years. New CEO Michael Bender attributes the decline to the company losing its identity and core customer focus, and is now implementing a turnaround strategy centered on returning to the company's original value-oriented approach.
Summary
Kohl's department store was founded in Wisconsin in 1962 and became a retail success story by serving middle America with proprietary brands and an emphasis on value. The company went public in 1992 with 76 stores and thrived alongside other major department stores like Macy's and Bloomingdale's, with its stock reaching an all-time high of approximately $82 per share in late 2018. However, the company has experienced significant challenges over the past five years, including rapid executive turnover, declining foot traffic and sales, and increased competition, resulting in its stock price plummeting nearly 70% to trade under $20 per share.
Analysts and current CEO Michael Bender identified the root cause of Kohl's decline: the company lost its identity and stopped listening to its core customers. Specific missteps included removing entire product categories like petites and jewelry that customers could not substitute elsewhere. Additionally, Kohl's attempted to adopt strategies from competitors, trying to position itself as an off-price retailer rather than staying true to its department store identity, which alienated its traditional customer base.
The macro environment has also pressured Kohl's significantly, particularly affecting lower to middle-income consumers who represent the company's core demographic. Issues including soaring gas prices, rising inflation, and political uncertainty have created additional headwinds. Since Michael Bender became permanent CEO in late 2025, the company has focused on returning to its foundational strengths: understanding customers, strengthening the balance sheet, ensuring value, and committing to a clear strategic direction. Early results show promise, with stock jumping approximately 120% over the past year and the company reporting its best comparable sales growth in four years in its first quarter earnings report, though revenue still declined overall. Bender characterizes the turnaround as being in its early stages, with the primary objective being a return to growth.
Key Insights
- Kohl's lost its identity when it stopped listening to customers and removed non-substitutable product categories like petites and jewelry that customers depended on
- Analysts determined that Kohl's alienated its customer base by attempting to become an off-price retailer instead of maintaining its position as a traditional department store
- Middle-income and lower-income consumers, who are Kohl's core demographic, have experienced the most disruption from macro pressures including inflation, gas prices, and political uncertainty
- Since Michael Bender became permanent CEO in late 2025, Kohl's stock has recovered approximately 120% over the past year and achieved its best comparable sales growth in four years despite revenue declines
- The company's turnaround strategy focuses on returning to its core strengths of understanding customers, providing value, strengthening the balance sheet, and maintaining a consistent strategic direction
Topics
Transcript
[0:00] Kohl's was once one of the most [music] beloved department stores in the country. Now, 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 growing private label, and it's 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. >> The first Kohl's department store opened in Wisconsin in 1962. 30 years later, the company made its IPO with 76 stores across the Midwest. Kohl's built its [0:30] brand on serving middle America with a strong portfolio of proprietary brands and an emphasis on value. At its peak, Kohl's…
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