How Kohl’s Lost Its Way — and Is Trying to Become Relevant Again

The aisles feel emptier. The familiar red price tags are still there, but the energy isn’t. Kohl’s — once the go-to mid-market department store for suburban moms and weekend warriors — has seen its stock shed nearly 60% of its value over the past three years, dragging its market cap below $2 billion. The numbers don’t lie: same-store sales have declined for six straight quarters, and the company’s core customer — the 35- to 54-year-old woman with a household income of $75,000 — is defecting to Target, Amazon, or simply spending less. So what happened? And more importantly, can Kohl’s claw its way back?

This isn’t just a story of retail Darwinism. It’s a case study in how a once-dominant brand fumbled its identity, chased the wrong trends, and now faces an existential reckoning. Let’s dig into the wreckage — and the turnaround playbook that might just save it.

The Golden Era and the Slow Fade

Kohl’s wasn’t always a cautionary tale. Founded in 1962 in Brookfield, Wisconsin, the chain grew steadily by offering a curated mix of national brands (Nike, Levi’s, KitchenAid) at discounted prices, wrapped in a no-frills, self-service format. By 2010, it had over 1,000 stores and a loyal customer base that appreciated the predictable 20%-off coupons and the hassle-free return policy. It was the sweet spot between discount and department.

But then something shifted. The rise of off-price retailers like TJ Maxx and Ross Stores ate into Kohl’s value proposition. Amazon started selling everything from sneakers to small appliances. And Target — after a decade of reinvention — became a legitimate style destination. Kohl’s, caught in the middle, didn’t pivot fast enough.

“Kohl’s suffered from a classic identity crisis,” says Sarah Johnson, retail analyst at GlobalData Retail. “It tried to be everything to everyone — apparel, home goods, beauty, even groceries in some pilot stores — but ended up being nothing special to anyone. The customer didn’t know why she should choose Kohl’s over a dozen other options.”

The numbers back that up. Revenue peaked at $19.9 billion in fiscal 2017 and has been sliding ever since, hitting $16.1 billion in fiscal 2024. Meanwhile, gross margins contracted from 37% to 34% as the company slashed prices to clear inventory. The stock, which traded above $80 in 2016, closed at $11.42 on Monday — a far cry from its glory days.

What Went Wrong: Missteps and Missed Opportunities

Kohl’s missteps are a laundry list of retail sins. First, the Sephora partnership. In 2021, Kohl’s struck a deal to open Sephora shops inside 850 of its stores. On paper, it made sense: beauty drives foot traffic and higher margins. But the execution was messy. The shops were often understaffed, the product selection was limited compared to standalone Sephora stores, and the partnership did little to bring in new customers. “Sephora didn’t fix the core problem — Kohl’s apparel business was still weak,” notes Michael Brown, partner at management consultancy Kearney. “Beauty was a Band-Aid, not a cure.”

Then there was the Amazon returns gambit. In 2019, Kohl’s began accepting Amazon returns at all stores, hoping to lure Amazon shoppers inside. It worked — sort of. Traffic spiked, but conversion was abysmal. People came in, dropped off a box, and left. The program cost Kohl’s millions in handling fees and didn’t meaningfully boost sales. Meanwhile, Amazon quietly built its own return network, making Kohl’s less special.

And let’s not forget the ill-fated push into activewear. Kohl’s doubled down on Nike and Under Armour, but those brands were already widely available — and often cheaper — on Amazon and at Dick’s Sporting Goods. The result? Kohl’s ended up with too much inventory, too many clearance racks, and a store that felt cluttered and tired.

The Turnaround: Can New Leadership Right the Ship?

Enter Tom Kingsbury, a retail veteran and former CEO of Burlington Stores, who took the helm at Kohl’s in late 2022. Kingsbury didn’t mince words. In his first earnings call, he admitted the company had “lost its focus” and needed to “return to basics.” His plan? Simplify the merchandise mix, sharpen pricing, and improve the in-store experience.

So far, results are mixed. Same-store sales are still falling — down 4.5% in the most recent quarter — but the decline is slowing. Kohl’s has also trimmed its store count, closing 18 underperforming locations in 2024, and plans to close more this year. Inventory levels are down 12% year-over-year, a sign that the company is finally getting serious about supply chain discipline.

But the real test is whether Kohl’s can win back its core customer. That means offering a compelling reason to visit — not just a coupon. Kingsbury is betting on exclusive brands. Kohl’s recently launched a new private label called “S.O.L.” (Son of a Lad) aimed at younger shoppers, and is expanding its “Simply Vera” line with Vera Wang. It’s also testing smaller-format stores in off-mall locations, hoping to capture more convenience-driven trips.

“The turnaround will take time — probably 18 to 24 months,” says Jessica Ramirez, senior retail analyst at Jane Hali & Associates. “Kohl’s has the balance sheet to survive, but it needs to prove it can generate consistent foot traffic and conversion. The next holiday season is critical.”

In a sign of how far Kohl’s has fallen, the company’s stock recently got a small lift after rumors of a potential take-private deal — but nothing materialized. Meanwhile, a tale of two Wendy’s shows that even struggling retailers can catch a meme-stock wave. Kohl’s hasn’t been that lucky.

What It Means for Investors — and Shoppers

For investors, Kohl’s is a high-risk bet. The company carries $1.2 billion in long-term debt, and its free cash flow has turned negative in two of the last four quarters. The dividend — once a reliable 5% yield — was slashed by 50% in 2023 and could be cut again. Wall Street is skeptical. Of the 20 analysts covering the stock, only 4 rate it a “buy,” with a median price target of $15 — implying just 30% upside.

For shoppers, the changes are incremental but noticeable. More clearance racks are being replaced with full-price displays. The Sephora shops are getting better trained staff. And the coupons? They’re still coming, but with more targeted offers based on purchase history. “We’re trying to be less promotional and more personalized,” Kingsbury said in a recent interview.

The broader retail landscape doesn’t help. Department stores as a category have been shrinking for years. Macy’s is closing 150 stores. JCPenney is a shadow of its former self. Even Nordstrom is struggling. Kohl’s may be fighting for survival in a shrinking pond. But there’s a precedent: DPC Holdings soared 42% on its debut, showing that the IPO market is showing life again — but that’s a different kind of retail story.

Kohl’s isn’t going bankrupt tomorrow. It has $1.5 billion in liquidity and a loyal base of coupon-clippers. But relevance is a different metric. To become relevant again, Kohl’s must answer one question: Why should a customer walk past Target and Amazon to come here? If Kingsbury can’t find a convincing answer, the next decade will be even uglier than the last.

Looking ahead, watch for Kohl’s holiday sales numbers in January. If they show a same-store sales increase — even 1% — the turnaround narrative might gain traction. If not, expect more store closures, more debt restructuring, and maybe a fire sale. The clock is ticking.