By Suzanne Kapner

Kohl's shoppers have a message for incoming Chief Executive Ashley Buchanan: Bring back the old Kohl's.

To chase younger shoppers and reduce inventory, the department-store chain in recent years scaled back fine jewelry, petite clothing sizes and popular private-label brands to make way for Sephora cosmetics and Babies "R" Us shops inside its stores. The moves upset some longtime customers and sent Kohl's sales into a nosedive that wiped out more than half a billion dollars in revenue over two years.

Departing CEO Tom Kingsbury owned up to those mistakes on a November conference call with analysts. Kohl's isn't backing away from Sephora or Babies "R" Us, which it says have been successful at attracting younger shoppers. But it is bringing back much of the merchandise it removed.

It will be up to Buchanan, who took the helm last week, to decide whether to follow through on that plan. He steps into the role during a period of turmoil for the company. Buchanan, 50 years old, will be the third CEO at Kohl's in three years.

Adrienne Cestare-Alfano, 73, a Kohl's customer for more than two decades, said she has been shopping there less since the chain reduced the selection of petite clothing and private brands such as Sonoma jeans.

"Why do I want to see Nike and Eddie Bauer in Kohl's when they are for sale all over the mall?" said Cestare-Alfano, who lives in Middletown, Del. "Undo the last few years of changes and get back to being my store."

Buchanan, who spent more than a dozen years at Walmart before becoming the CEO of crafts retailer Michaels, will face a conundrum at Kohl's that has tripped up other department-store leaders: how to attract new, younger customers without alienating the existing shoppers who account for the bulk of sales. He must also make the stores more appealing to shop, and tidy up the messy displays that have turned off some customers.

Buchanan has some experience walking that line. In 2023, while at Michaels, he introduced MakerPlace, an online marketplace for handmade goods, classes, how-to guides and supplies that rode the Taylor Swift bracelet-making craze among tweens, without turning off older crafters. It was designed as an alternative to Etsy and attracted younger shoppers, though it hasn't become a major competitor to Etsy as a retailer of handmade goods. A Michaels spokeswoman declined to comment.

At Kohl's, Buchanan first needs to stop the bleeding. Its sales have declined for 11 consecutive quarters. The stock has lost nearly 50% of its value over the past year.

Clare Lundberg, who is 70 and lives in Beverly, Mass., said she was unhappy that the addition of Sephora shops took space away from jewelry offerings at Kohl's. "To me, it's a waste of space," she said. "I'm not a Sephora shopper and I don't go to Kohl's for cosmetics."

Kingsbury has said that 40% of the customers who are shopping Sephora at Kohl's are new to Kohl's and that Babies "R" Us is broadening the retailer's reach with young families.

Buchanan declined to comment for this article.

The Texas native studied at Baylor University in Waco, Texas, before joining the retail practice at the consulting firm Accenture. He joined Walmart in 2007 and rose to become chief merchandising officer at its Sam's Club division and chief merchant of Walmart's U.S. e-commerce arm.

In January 2020, when Buchanan became Michaels CEO, the company was struggling. Stores were dirty and weren't well-stocked. Michaels was also playing catch-up on e-commerce, according to people familiar with the situation.

Buchanan streamlined the supply chain, cleaned up stores, restocked shelves, opened new locations and upgraded the website to make it easier for shoppers to use. He expanded third-party offerings through an online marketplace and added in-store birthday parties and crafting events.

People who know him say he has a keen eye for spotting products that will sell, and often uses his three daughters as a focus group. He once took one of his young daughters to a bracelet-making class at a Michaels store. Her feedback: more colors.

Buchanan's experience taking Michaels private, in a 2021 sale to Apollo Global Management, could come in handy if Kohl's decides to follow other department stores and regroup away from the public market.

JCPenney became a private company after its 2020 bankruptcy, and Saks Fifth Avenue parent HBC went private that same year. In late December, Nordstrom agreed to be taken private in a deal led by the Nordstrom family. These chains are betting that as private entities they can make investments for the long term without worrying about reporting quarterly profits to Wall Street.

Kohl's has an advantage in that its more than 1,100 stores aren't located in aging enclosed malls, but rather in strip malls, which have more accessible parking and tend to be located closer to main highways.

Location alone, though, isn't enough to overcome a poor shopping experience. When John Edwards visited the Kohl's near his home in University Park, Fla., looking for a pair of Levi's, he found the display a mess. "Sizes were mixed up and colors were scattered here and there," said Edwards, 82.

His next stop was Dillard's, where the display was neat and he found what he needed in minutes. "Guess where I will shop next time?" he said.

Write to Suzanne Kapner at suzanne.kapner@wsj.com

(END) Dow Jones Newswires

January 20, 2025 05:30 ET (10:30 GMT)

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