Kohl's Names Michelle Gass to Be New CEO -- 3rd Update
September 26 2017 - 5:58PM
Dow Jones News
By Suzanne Kapner
Soon after joining Kohl's Corp. as chief customer officer in
2013, Michelle Gass gave employees a pep talk at the retailer's
headquarters in Menomonee Falls, Wis.
Kohl's sales had begun to falter after several years of
postrecession growth, and the department-store chain, like its
competitors, was grappling with how to adapt to the shift to online
shopping.
Ms. Gass told the gathering that Kohl's needed to think
differently and shouldn't be afraid to try new ideas, a departure
for the company, recalled an employee in attendance.
That openness to change has served Ms. Gass well. On Tuesday,
Kohl's said the 49-year-old would succeed Kevin Mansell as chief
executive in May, becoming the 55-year-old company's first female
CEO.
Ms. Gass wasn't schooled in the art of selling dresses, suits
and other department-store fare. After studying chemical
engineering at Worcester Polytechnic Institute and receiving a
master's in business administration from the University of
Washington, she spent six years honing her marketing skills at
Procter & Gamble Co. before joining Starbucks Corp. in
1996.
When she departed the coffee chain after nearly 17 years, CEO
Howard Schultz credited her with helping develop such products as
the Frappuccino.
Ms. Gass earned kudos as a marketer who "always gave very clear
direction," said Craig Weatherup, a longtime Starbucks
director.
Her responsibilities as chief customer officer at Kohl's
included marketing and e-commerce but were expanded in 2015 to
include those of chief merchandising officer, giving her
responsibility for all of its products.
She pushed Kohl's to embrace the health-and-wellness trend, and
helped cement a partnership with Under Armour Inc.
Ms. Gass was also behind Kohl's arrangement with Amazon.com
Inc., in which the online retailer will sell its electronic
devices, such as the Echo, in Kohl's stores and allow shoppers to
return goods bought on Amazon at 82 Kohl's locations.
"It's kind of controversial what they did with Amazon," said
David Katz, chief marketing officer of Randa Accessories, which
makes products under the Levi's, Dockers and Chaps brands for
Kohl's. "But it's better to at least do something than to not make
decisions in this environment."
Chip Bergh, CEO of Levi Strauss & Co., called Ms. Gass "a
proven leader who has been a positive force for the business."
People who have worked with Ms. Gass say she is quick to change
course when an idea doesn't pan out. For example, Kohl's
experimented with in-store coffee shops several years ago but
abandoned the plan. "This was one of many ideas the teams
experimented with," a Kohl's spokeswoman said.
The 65-year-old Mr. Mansell, who is both CEO and chairman, will
retire in May. Since he joined Kohl's 35 years ago as a divisional
merchandise officer, the company has grown from a dozen locations
to a national chain with more than 1,100 stores, generating nearly
$19 billion in annual sales.
Kohl's board intends to select a chairman from among its current
independent members. Asked why he was relinquishing his board seat,
Mr. Mansell said in an interview that Ms. Gass deserved the right
to run the company as she sees fit without him "having a seat at
the table."
Kohl's also said another top executive, Chief Operating Officer
Sona Chawla, will become president in May. Ms. Chawla, 50, joined
the company in 2015 from Walgreens Boots Alliance Inc., where she
was chief marketing officer and ran e-commerce.
She and Ms. Gass were seen as finalists for the top job. Mr.
Mansell previously told the Journal that they were most likely to
succeed him, saying "they both are incredible leaders."
"We view both Ms. Gass and Ms. Chawla as strong internal
promotions, with deep expertise in the omni-channel strategies that
will be necessary to drive [Kohl's] next leg of growth," Jefferies
analyst Randal Konik said in a research note.
Ms. Gass has her work cut out for her. The company had said
sales would rise to $21 billion by the end of 2017 under a plan
that included a new loyalty program, revamped beauty departments
and more personalized marketing. But sales are on track to fall to
$18.58 billion this year from $18.69 billion a year ago, according
to FactSet.
--Joann S. Lublin and Austen Hufford contributed to this
article.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com
(END) Dow Jones Newswires
September 26, 2017 17:43 ET (21:43 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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