Michelle Gass, CEO of department store chain Kohl’s, is stepping down from her role early next month and will become the president of denim giant Levi Strauss & Co.
Levi’s said Tuesday in a release that Gass will begin on Jan. 2, and the board of directors has put in motion a progression plan for her to succeed Chip Bergh as president and CEO in the next 18 months. She is expected to join the board of directors on that date. Gass, who joined Kohl’s in June 2013 as chief merchandising and customer officer, became CEO in May 2018.
Bergh joined Levi Strauss’ helm in September 2011, playing served in top roles at Procter & Gamble during his 21-year residency.
Kohl’s said in a separate release that Gass plans to step down on Dec. 2 and Tom Kingsbury, a board director, will serve as interim CEO.
The moves come as Kohl’s have been under pressure by activist investors to shake up management amid weak sales.
Kohl’s declared preliminary figures for its third-quarter period. It said that equivalent store sales will be down 6.9%, while net sales will be down 7.2 % contrasted with the year-prior period. The organization is expected to release its results on Nov. 17.
Kohl’s battled with anemic sales before the pandemic. Sales and profits bounced back in 2021, however the department store is presently fighting higher costs and a pullback from its price-conscious shoppers who are being more careful of their spending notwithstanding rising costs for gas, food, and pretty much all the other things.
In July, Kohl’s canceled buyout converses with Franchise Group, the owner of Vitamin Shoppe, citing economic conditions.
In August, the Menomonee, Wisconsin, chain cut its sales and profit expectations for the year subsequent to being compelled to reduce costs to shed undesirable merchandise. The department store likewise cut back on orders in front of the critical holiday period.
“It is unsurprising that Michelle Gass is to relinquish her role as CEO,” said Neil Saunders, managing director at GlobalData Retail, in a report published on Tuesday. “This will be seen as a sacrificial offering to investors, who have long pushed for widespread change in the management suite.”
Yet, Saunders expressed that regardless of presiding over sales declines, Gass further developed fashion varieties and regulated a key partnership with Sephora, which is carrying out shops at Kohl’s stores. That partnership has attracted younger customers who are purchasing different items at the store. She likewise supervised the partnership with Amazon where clients can return items bought at the online retailer at its store locations. So Saunders believes her legacy ought to be “viewed favorably.”
Saunders, nonetheless, added that Kohl’s requirements to find an extremely durable substitution as speedy as conceivable as retailers face a challenging year.
Ancora possesses 2.5% of outstanding shares in Kohl’s and had pushed for the removal of Gass and Chairman Peter Boneparth. It said Tuesday it was satisfied that Kohl’s had named retail sector veteran Kingsbury, nominated by its shareholder group in 2021, as its interim CEO. Its other board nominee Margaret Jenkins will be part of the new committee tasked with distinguishing the right permanent leader for the business, Ancora said.
“Ancora has been a long-term shareholder of Kohl’s and believes that under the right leadership, the company can be a source of tremendous value for investors, customers, suppliers and employees, ” said Fredrick D. DiSanto, chairman and CEO of Ancora, and James Chadwick, president of Ancora Alternatives LLC.
Shares of Kohl’s acquired than 8%, or $2.25, to $29.10 in morning trading, while shares of Levi’s lost over 1%, or 21 cents, to $15.13.
