Kohl’s CEO Michelle Gass defended the company’s progress at refreshing its brand Monday (March 7) amid investor pressure on the department store to consider a sale.
“Make no mistake, this is a transformation,” Gass said at a virtual investor meeting, per CNBC. “It is a complete reinvention of our business model and our brand.”
The company plans to open more than 100 smaller-format stores in the next four years in an effort to draw in new shoppers. Gass said in the report these stores — the first of which is being tested around Seattle — are about 35,000 square feet, compared to the 80,000-square-foot store found at the typical Kohl’s location.
“This year is a big year for us,” she said, according to the report. “The framework that we’ve put out there for investors … it’s a very thoughtful guide for us.”
Meanwhile, Kohl’s also wants to increase Sephora’s sales to more than $2 billion a year. The company has about 200 Sephora stores-within-stores and plans to have 850 by year’s end.
The company — the second-largest department store chain in the U.S. — released long-term financial goals Monday, including plans to improve sales by a low-single-digital percentage each year. According to CNBC, Kohl’s shares fell more than 8% following the presentation, with some investors let down by the forecast and others hoping for more detailed discussions of a sale.
Kohl’s has been pressed by activist investors to either sell itself outright or consider a spin-off of its eCommerce division.
Read more: Kohl’s Urged to Sell Company or Spin off eCommerce Business
New York-based hedge fund Engine Capital has said it wants Kohl’s to either sell the company or separate its eCommerce business in response to its failing stock price, which slumped 25% in the second half of 2021 after more than doubling from the pandemic lows set in 2020.
Engine, which owns around 1% of Kohl’s has argued that the company’s online sales revenue alone, projected at about $6.2 billion, would value its digital business at $12.4 billion.
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