Kohl’s boss defends Amazon returns tie-up after ‘disappointing’ festive trading

Speaking at the NRF Big Show in New York yesterday, Kohl’s chief executive Michelle Gass hit back at critics of the department store chain’s returns partnership with Amazon, claiming it is “working” by bringing more footfall traffic into the retailer’s 1,160 stores.

“Is Amazon working? Amazon is definitely working. The returns programme is working. We’re seeing an increase in traffic. We’re getting new customers, younger customers, and as we expected, some of them are also buying,” she said.

“It’s not 100% but some of them are, and we’re delivering a fantastic customer experience regardless. I look at the partnership as a long-term investment in customer engagement and acquisition.”

Following a trial in 100 stores which began in 2017, the Amazon partnership was rolled out across all Kohl’s stores last year.

Criticism of the partnership follows what Gass herself admitted was a “disappointing” Christmas trading period for the retailer, which saw in-store sales during November and December fall 0.2%, which in turn has led to Kohl’s tempering its profit expectations for the year to the “low end”.

Gass said the festive period had been hit by an underperformance in its womenswear category but said the retailer would be unveiling new and improved categories at its upcoming investor day in March in a bid to turn around flagging sales.

“In 2019, especially the first half of the year, trading was tougher than expected. First half of the year we ended up with a 3% dip in sales. Second half of the year, we finished about flat. I wanted to see more, for sure, but we have a lot of initiatives coming up and some will take longer than others,” she said.

“We expected more from some of our exclusive brands in womenswear. Womenswear is about 30% of our total business, and 70% of our private brands. So, if you hit speedbumps there, that has a major effect on the company. We have plans around that and we’re making changes.”

Gass also announced that Kohl’s is currently trialling a new beauty concept in eleven of its stores, as it seeks to increase sales in a category which has historically been a “small part of the business”.

“I’m very excited to lay out some new business opportunities and one of those is the beauty category. It’s a small part of the Kohl’s business now, but it’s growing significantly,” she said.

“We’re investing in 11 pilot stores where we have completely re-engineered and re-imagined the beauty experience for our customers. We’ve had rave reviews from customers in those stores so far.”