The times, they are a-changin’, at least, that’s what Bob Dylan figured. But at retailer Kohl’s (KSS), they may have changed a bit too much for some shoppers’ liking. They are already petitioning for reversions and rollbacks with the arrival of a new CEO, and investors do not seem to mind. Shares are up nearly 2.5% in Tuesday afternoon’s trading as a result of the growing outcry.
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Incoming CEO Ashley Buchanan has a bit of a mandate going into his tenure: “Bring back the old Kohl’s.” That is exactly what a Wall Street Journal report called it, as Kohl’s made a lot of changes over the last few years under CEO Tom Kingsbury.
Kingsbury’s tenure fought hard to get younger shoppers in the door, and thus saw Kohl’s handle less in the way of jewelry and clothing to add things like new cosmetics and whole pop-up shops for Babies ‘r’ Us operations. This had a limited effect on younger shoppers, but at the same time annoyed long-time shoppers, which slashed revenue, prompting a shortfall of over $500 million in two years’ time. As one customer, 73 year old Adrienne Cestare-Alfano, put it: “Why do I want to see Nike and Eddie Bauer in Kohl’s when they are for sale all over the mall?”.
And Fewer Of Them, Too
Another major change that recently emerged, that many long-time Kohl’s shoppers may not like, is that many Kohl’s locations will no longer exist. Just last week, Kohl’s announced plans to close 27 stores outright, along with its e-commerce fulfillment center in San Bernardino, California. That pares down fulfillment centers to just 14, noted a report from Fast Company, and drops down stores only fractionally from the 1,150 locations previously established.
Many states will see no closures at all. Of the ones that will, many will lose just one or two locations. But the far and away winner of the Kohl’s shutdown stakes is California, which will lose 10 of the 27 locations closing nationwide. The move is being done to improve overall efficiency in operations, as the stores shutting down were considered “underperforming.”
Is Kohl’s a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on KSS stock based on seven Holds and six Sells assigned in the past three months, as indicated by the graphic below. After a 43.52% loss in its share price over the past year, the average KSS price target of $14.08 per share implies 5.86% upside potential.
