Kohl’s inventive strategy to charm customers into its stores has earned the firm’s praise and Wall Street support. But the shopper went to other places, and the investors have started losing confidence in the firm. The company said on Tuesday that in their new quarter, sales of stores that had been open for at least a year had increased by nearly 0.5%. Compared with the same period last year, Kohl’s profit in the quarter fell by 24%, and the retailer lowered its prospects during the holiday shopping period. This is the second time Kohl lowered the forecast this year.
Kohl’s CEO Michelle Gass tried to make the most of the effects. She said in a prepared statement: “We have a solid motion to enter the holiday season.” The results show that Kohl’s face-changing plan has not been attained. Although Kohl is trying to reshape itself to accommodate the dramatic changes in the retail industry, the company is still unable to shun the pressure from other department stores, online brands, large retailers and discount chains. According to estimations by UBS earlier this year, Kohl’s market share has lost 18% since mid-2011. TJX (TJX), including TJMaxx and Marshalls, said on Tuesday that sales at least one year in the last quarter had increased by 5%. The company has improved guidance for the rest of the year. Kohl’s chief executive, Gass, took an active approach to reorganize retailers’ more than 1,100 stores in the online shopping era. Many analysts believe that Kohl Department Store is in a better position than Macy’s, JCPenney and other shopping mall brands, as most of Kohl’s stores are outside the mall. Kohl’s has partnered with Amazon to provide free returns for shop customers. Gass said earlier this year that the promotion of Amazon to all its stores was the company’s “single biggest move” this year.
It also reduced the size of some stores and leased excess space to companies such as Aldi and Planet Fitness (PLNT). It also tested concepts such as “clothing bar” to attract millennials. The clothing bar allows women to “find” jobs and social occasions in one place. But in order to survive, Kohl may need to get bigger.