Kohl’s Planning to Get “Active” While Investors Push for Sale

Activists Investors Make Push

Kohl’s (KSS) executives kicked off the week by holding an investor-day event and sharing the company’s long-term plans. The meeting came amid ongoing pressure from activist investors, who want the retailer to consider selling itself.

Engine Capital and Macellum Advisors have criticized how Kohl’s performed during the pandemic, saying it lagged behind off-mall competitors such as TJ Maxx (TJX) and Target (TGT). The group argues department-store chain Macy’s (M) had also been more successful in that time. They want Kohl’s to sell and lease back some of its real estate holdings in order to free up cash.

Putting On Its Face

A key part of the Kohl’s playbook involves the makeup brand Sephora (LVMUY) and the company’s plans to grow related sales to $2 billion annually. Within its brick-and-mortar stores, Kohl’s has opened around 200 Sephora shop-in-shops, and the goal is to have 850 in place by 2023.

Kohl’s is also trimming things down to try and reach more customers. This includes plans to open around 100 smaller-format stores over the next four years — the first going up in the Seattle area. Executives say while Kohl’s locations are normally around 80,000 square feet, these stores are closer to 35,000 square feet.

Kohl’s Going Active

Executives say Kohl’s is working to become an activewear destination, rather than be chiefly associated with home goods and women’s clothing. So-called active merchandise made up 24% of Kohl’s revenue in 2021, up from 14% in 2016. This includes things like leggings, hoodies, seakers, and other types of athletic apparel.

Still, Kohl’s notes it’s not looking to get out of traditional clothing all together, with plans to stock more women’s dress sizes while also expanding offerings in swimwear and outdoor clothing. The company also says its “buy online, pick up in-store” option is coming to all locations this year. In the face of pressure from activist investors, Kohl’s is laying out its fitness plan.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS22030803