Michelle Gass, CEO of Kohl’s, is stepping down early next month to become the president of Levi Strauss & Co. Levi’s said Gass would start work and join its Board on January 2. The Board began a succession plan for her to succeed Chip Bergh as president and CEO in the next 18 months.
Gass, who started her career at Kohl’s in June 2013 as chief merchandising and customer officer, became CEO in May 2018. Bergh joined Levi Strauss in September 2011, working in top roles at Procter & Gamble during his 21-year tenure. Kohl’s said in a separate statement that Gass would step down from her position on December 2, and Tom Kingsbury, a board director, will step in as interim CEO.
The moves come as Kohl’s has been under pressure from activist investors to shake up management amid weak sales. In August, Kohl’s reduced its guidance for the year due to expectations of lower sales and escalating promotional activity.
Kohl’s announced its preliminary figures for its third quarter on Tuesday. It said that same-store sales would be down 6.9 percent, while net sales would be down 7.2 percent compared to the year-ago period. Kohl’s also said it expected to show an operating margin of 4.7 percent in the quarter and EPS of 82 cents a share, higher than Wall Street’s consensus estimate of 64 cents.
The company will release its full results on November 17.
Kohl’s Board also formed a committee led by Michael Bender, including Christine Day, Margaret Jenkins, Peter Boneparth, and Tom Kingsbury, to oversee the search for a new CEO.
Kohl’s Board Chair Peter Boneparth said, “The Board is grateful for Michelle’s many contributions since she joined the company in 2013. Under her leadership, the company has driven a strategic transformation, expanded its partnerships and brand portfolio and supported an inclusive and collaborative culture. On behalf of all Kohl’s associates, we wish her well in her next endeavor.”
Boneparth added, “Tom is highly regarded and perfectly equipped to take the role of interim CEO, and the Board looks forward to working closely with him and the team to facilitate a smooth transition process and continue driving Kohl’s strategy.”
Gass said, “I am incredibly proud of what the team at Kohl’s has accomplished, and I’m very confident in their ability to drive continued innovation, growth and value for customers. Kohl’s associates and brand partners are an inspiration to me, and I am truly grateful to have had the opportunity to work with this great team and company.”
A Kohl’s director since 2021, Kingsbury’s past roles include president and CEO of Burlington Stores, senior executive vice president of Kohl’s, and management positions at The May Department Stores company, including president and CEO of its Filene’s division. He is currently a director of Tractor Supply Company, BJ’s Wholesale Club Holdings, Inc. and Big Lots, Inc.
Kingsbury stated, “I’m proud and humbled to take the Interim CEO role during such an important time for the company. Despite a challenging economic environment, Kohl’s is well-positioned for long-term success with its unique off-mall store footprint, omnichannel presence, and loyal customer base. The Board and I are committed to the continued refresh and innovation strategy Kohl’s has begun, the cornerstone of which is the terrific partnership we have with Sephora. I firmly believe in the long-term potential of this company, our associates and our ability to deliver value for shareholders.”
Levi’s noted that Gass led the transformation strategy at Kohl’s to position the company for long-term profitable growth. She has driven a “significant reinvention effort for more than 1,100 Kohl’s stores while growing its digital business at a double-digit compounded annual growth rate to more than $6 billion. She has also led strategic innovations at Kohl’s, including introducing Amazon returns and spearheading the long-term strategic partnership with Sephora, which has expanded to 600 Sephora at Kohl’s shops.”
While at Starbucks, Gass held leadership roles over nearly 17 years and led product innovation, including expanding the Frappuccino blended beverage brand and launching the Starbucks loyalty program. Her last project at Starbucks was as president, Starbucks EMEA, leading its EMEA business.
“We are delighted that an executive with Michelle’s background, experience and stature is joining as president to work side-by-side with Chip for a meaningful transition period before becoming CEO,” said Bob Eckert, chairman of the LS&Co. Board of Directors. “Michelle’s deep retail and omnichannel experience combined with her track record of building brands and meaningful innovation is a perfect fit for the skills needed to lead this company for the long term and create significant value for our stakeholders.”
“One of my biggest legacies at LS&Co. will be my successor, passing the baton to someone who will take the company to the next level. I am thrilled not just about Michelle being my successor but also about having the chance to work closely together during the transition,” Bergh said. “I have known Michelle for a decade, and she has many of the qualities we value in our leaders: she is humble, approachable, transparent and driven by purpose and values. She has a track record of building brands and talent. Michelle also brings more than 25 years of retail and omnichannel experience and a demonstrated track record of innovation, driving transformational ‘big ideas’ not just on products but also business models. With this move, I am even more confident in this company’s future.”
“I am thrilled to join Levi Strauss & Co., with its iconic brands, incredible team and unwavering commitment to corporate citizenship,” Gass said. “With the Levi’s brand stronger than ever, Dockers reinvigorated and the Beyond Yoga acquisition expanding the company’s addressable market, I look forward to working alongside Chip and his talented team to realize the incredible potential for the business in the years to come.”
Photo courtesy Kohl’s
