New York
CNN Business
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In an unexpected executive reshuffle, Kohl’s CEO Michelle Gass is leaving the department store chain to become Levi’s CEO-designate.
Kohl’s (KSS) has been under intense pressure from activist investors on Wall Street in recent years. Activist groups have pushed Kohl’s (KSS) to break up its online business, sell its real estate or take the company private.
Department store chains like Kohl’s, Macy’s (M) and JCPenney have been losing customers to discount clothing stores like Amazon (AMZN), Target (TGT) and TJ Maxx.
Gass has developed several strategies to turn around Kohl’s, such as a return program with Amazon, but the company has struggled this year.
On Tuesday, Kohl’s released preliminary third-quarter results, showing a 6.9% year-over-year decline in sales.
Still, the loss of Gass, a former Starbucks executive, was a blow to Kohl’s.
“She is also responsible for guiding Kohl’s through challenging times of the pandemic and making improvements,” said Neil Saunders, an analyst at GlobalData Retail. “To be fair, Gasth has saved Kohl’s from a deeper recession.”
Meanwhile, Levi’s (LEVI) has gone from strength to strength since going public again in 2019.
Denim brands benefit from people dressing more casually at work and social events. It has also expanded into shirts, sweatshirts and other apparel and has attracted more women into its customer base.
Gass’ departure from Kohl’s for Levi’s signifies a bigger shift in the balance of power in retail.
Large department stores used to be the dominant force, and clothing brands depended on them to reach customers. But department stores are no longer the only option, as brands can sell directly to customers online, open their own stores, or sell to a variety of smaller retailers.