Kohl’s announced last week that it will close 27 underperforming locations in 15 states by April. This is a drastic decision that affects a fraction of their 1,150 store base. According to what they explained, this is due to a strategy with which the chain seeks to boost profitability and improve falling sales, which have become a real problem during this last period. The plan is similar to what Macy’s will do, which has already announced the closure of 66 stores and plans to remodel 350 by 2026.
Kohl’s announcement comes at a time when the Menomonee Falls, Wisconsin-based chain has posted 11 consecutive quarters of declining sales. Against this backdrop, there will be many internal changes within the company. One example of this is the addition of Michaels Buchanan, a retail veteran, as the company’s chief executive officer.
Buchanan will assume this position, which was previously held by Tom Kingsbury. But the outgoing CEO will not be leaving the company; he will remain as an advisor to Michaels and will retain his seat on the company’s board of directors until his retirement, scheduled in May. Recall that Kingsbury served as interim CEO of Kohl’s in December 2022 and became the permanent leader in February 2023.
Workers affected by Kohl’s store closures
Kohl’s declined to disclose the number of workers affected by this restructuring plan that will lead to the closure of many of its stores. The company indicated that the workers have already been informed of this situation and have been offered a “competitive severance package”. In addition, they were given the opportunity to apply for other vacant positions in the retail chain. Among the stores identified for closure are 10 in California.
“As we continue to develop our long-term growth strategy, it is important that we also take difficult, but necessary steps to support the health and future of our business for our customers and our teams,” Kingsbury said in a statement. U.S. department stores have had a tough few years. This is because consumers continue to look for deals online. As a result, many chains decided to adapt to the new ways of doing business and restructure, in some cases by closing stores to give more priority to other aspects.
The case of Macy’s: it will close 66 stores during the first months of 2025
Macy’s revealed at the beginning of 2025 that it will close 66 stores as part of its restructuring plan. The company revealed the locations and among them is in a historic building in Philadelphia. As explained, most of these stores will close during the company’s first fiscal quarter of this year.
This decision is part of a strategy announced in February 2024, which calls for closing approximately 150 under-producing stores, while modernizing 350 remaining stores through fiscal 2026. The closures come at a time when the company is looking to improve sales as shoppers have reduced their purchases of discretionary items amid high inflation.
In November, Macy’s reported a drop in earnings and sales in its fiscal quarter. And while it raised sales expectations for the current fiscal year, it also lowered earnings projections and opted to close stores. Macy’s also reported that the stores that will close represent 25 percent of the company’s total square footage, but less than 10 percent of its sales.
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