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Kohl's to Drop 8 Underperforming Women's Clothing Brands

By Daniel B. Kline - Mar 5, 2020 at 2:01PM

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The department store chain will overhaul its offerings in the category this year.

Kohl's (KSS -3.06%) CEO Michelle Gass is blaming the retailer's disappointing 2019 on three main factors: the home segment, the women's segment, and the company's gross margin. It has already made moves to fix its home segment problems by adjusting pricing strategies and introducing new brands. It's handling the margin issue by planning for more sales to be digital, which comes with added shipping costs.

That left the women's apparel category as the biggest drag left to be addressed, and Gass laid out her plan to do that during the chain's fourth-quarter earnings call.

The exterior of a Kohl's

Kohl's is dropping eight women's apparel brands. Image source: Kohl's.

The chain has already put new leadership in charge of its women's apparel business. Now, it plans to make what Gass described as "bold moves" to address its product mix.

"After a critical assessment across our entire brand offering, we've made the decision to exit eight women's brands over the coming year," she said. "We believe this will provide greater clarity for our customers and a more compelling and current offering."

In addition to dropping brands, the company also plans to add some. It's going to introduce some of the new offerings during its March 16 investor day event.

The women's apparel business has become increasingly competitive as retailers like Target aggressively add new house brands and bring new celebrity partnerships to bear. Gass deserves credit for identifying Kohl's problem here and moving decisively to address it.

Winning consistently in apparel isn't easy, as fashion is fickle and competition is fierce. Gass, however, seems to understand that this is an area of her business that needs near-constant attention and regular reinvention. If she keeps that attitude, she should be able to right the ship.

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