Retail

Kohl's CEO: COVID-19 Is Turbo-Charging Online Retail

Kohl's: COVID-19 Turbo-Charging Digital Retail

The COVID-19 pandemic has been a "great accelerator" in driving Kohl's to embrace eCommerce and make other changes in its operations faster than planned, the retail giant's Chief Executive Michelle Gass said on Monday (June 22).

In an interview with Bloomberg, Gass said that in light of new demands on retailers, Kohl's employees demonstrated nimbleness in finding ways to create safe distances between employees and customers as stores reopened following pandemic-driven closings. She said that setting up a curbside delivery system would normally have taken longer than two weeks.

Gass previously shared data indicating that sales are about 75 percent of year-ago levels at stores that have reopened.

As of June 5, 2020, Kohl's had reopened about 80 percent of the stores that were closed because of COVID-19, according to the company's latest quarterly report. In the same report, which covered the quarter ending in early May, Kohl's listed $280 million of costs that it said were "directly related to COVID-19."

Sales for the quarter were off $1.7 billion, or 43.5 percent, compared to the year-ago quarter. Digital sales for the quarter were up 24 percent.

As a portion of overall sales, digital sales were 45 percent for the first quarter of 2020 compared with 21 percent for the first quarter of 2019.

Before the pandemic, Kohl's had begun a partnership with Amazon that allowed returns of Amazon shipments to Kohl's stores. That arrangement was boosting foot traffic at the retailer's brick-and-mortar locations and will likely continue to do so, Gass told Bloomberg.

Although the crucial holiday shopping season doesn't begin for five months, store executives and investors are watching closely for signs of how 2020 will differ from prior years.

Gass acknowledged in Monday's Bloomberg interview that "the consumer has changed; [the] environment has changed."

“I don’t think any of us quite know yet how that holiday season will unfold,” she said. "It’s a fair assumption to say that Black Friday and [the] holiday will be different than in years past."

Kohl's (NYSE:KSS) shares closed Monday at $21.94, far below the $26 trading level posted before COVID-19 struck, but a vast improvement over the $11.51 trough in early April.

Target (NYSE:TGT) shares closed at $122.43 on Monday, roughly equal to pre-COVID levels. Walmart Inc. (NYSE:WMT) shares also are near pre-pandemic levels.

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