Kohl’s Corp. CEO Michelle Gass will leave the company for the top job at Levi Strauss & Co., trading a struggling discount department store for one of the most recognizable United States apparel brands.
Gass will join Levi on Jan. 2. She will serve first as president and then will become CEO within 18 months, succeeding Chip Bergh, based on a succession plan the board laid out. Tom Kingsbury, a Kohl’s director since 2021, will step in as interim CEO of the retailer starting Dec. 2 until a permanent successor is named.
The moves come after a difficult four-and-a-half-year tenure for Gass at Kohl’s. In August, the company slashed its earnings and sales guidance due to sinking demand as a result of higher inflation, which has left middle-income Americans who typically shop at the department store more price conscious.
Kohl’s ranks No. 21 in the Top 1000, Digital Commerce 360’s database of North American e-retailers by web sales. Levi Strauss & Co. ranks No. 196.
Bergh led Levi back onto the market in 2019 as a publicly traded company and has worked to expand its retail locations to lure shoppers with a wider variety of jeans, tops and accessories.
Kohl’s under pressure
Kohl’s has faced intense activist pressure to sell itself after a long stretch of flagging sales. The board took the company off the market in July after it failed to agree on a potential $8 billion deal, only two months after fending off an attempt by investor Macellum Capital Management to overhaul the board.
Gass’s departure will leave three of the largest U.S. apparel retailers with interim CEOs — Kohl’s, Gap Inc. and Under Armour Inc.
Kohl’s also reported preliminary third-quarter profit of 82 cents a share. Excluding some items, analysts surveyed by Bloomberg were looking for 63 cents. Preliminary operating margin was 4.7% in the quarter, above the average analyst estimate of 4.4%. However, comparable sales decreased 6.9%, a bigger decline than Wall Street had projected.
Levi reported third-quarter earnings on Oct. 6 that fell short of expectations. Bergh at the time said that inflation and concerns about recession were beginning to have an impact on performance. Like many apparel companies, the 169-year-old denim maker has experienced a buildup of inventory and a month ago projected a “promotional holiday season.”
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