By Christine Kern, contributing writer
Last year, Kohl’s launched its “Greatness Agenda,” aimed at mixing up merchandise, bringing in more national brands, and boosting its loyalty program as a way to draw new shoppers and increase sales, but the latest figures demonstrate that the plan hasn’t created the high returns it anticipated.
In fact, the Q2 report was a disappointment, demonstrating that same-store sales were up just 0.1 percent while profits actually dropped 44 percent to $130 million. Accounting for debt pay downs, profit fell 9 percent.
During the earnings call, Kevin Mansell, Chairman, CEO, and President of Kohl’s, said, “While our bold moves around the Greatness Agenda continue to produce expected results, the underlying business trend was softer as a result.”
Despite the disappointing numbers, however, Mansell asserted that “we remain committed to the Greatness Agenda and believe these initiatives will deliver our sales goal. Although sales for the second quarter didn't meet our expectations, we're definitely pleased to see more consistent positive comp store sales results especially in a quarter that was negatively impacted by a later start to the back-to-school shopping season.”
The Washington Post reported that Kohl’s is working diligently to increase sales at both the brick-and-mortar and digital levels, by investing in building out beauty and cosmetics areas and by investing in a new smartphone app and customized/personalized emails to improve the digital customer experience.
Mansell also highlighted the broad implementation of their localization strategy, stating “ By the end of this Fall, 40 percent of our business will be unique, localized assortments with the expectation that all departments will have unique, localized assortments by the end of next year.”
He also stressed the potential of the new “buy online, pick up in store,” program, for boosting sales. To date, the program has increased traffic in stores and to drive 20 to 25 percent “attachment sales” from customers who come into the stores to pick up online orders. Mansell anticipates that these numbers will increase as they begin to actively market the program this fall.
The question remains whether or not these initiatives will be enough to propel Kohl’s forward.
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