1 Important Thing Kohl's Is Doing Right
Shareholders are right to be concerned about the declining revenues Kohl's (NYSE: KSS) reported in both 2016 (-2.7%) and the first quarter of 2017 (-3.2%). Some investors may also be worried about the traffic decreases that have impacted Kohl's, and other retailers, in recent months. Indeed, the retail world is facing challenges as consumers shift from shopping in stores to ordering products online, but that doesn't mean shareholders should bail on Kohl's just yet. It's worth taking a closer look at one smart strategy Kohl's is using to shake up its merchandise mix and meet customers' cravings for a specific category of brands.
Like many department stores, Kohl's carries a blend of private, exclusive, and national brand merchandise. Both private and exclusive brands can only be bought at Kohl's, while national brands include well-known labels such as Nike that are sold at a variety of retailers. During the first quarter of 2017, Kohl's launched a new national brand, Under Armour, both in its stores and online. According to Kohl's CEO Kevin Mansell during the first-quarter conference call in May, the launch "exceeded a very aggressive ... sales plan with strong results across all categories."
This is impressive given that Kohl's didn't begin by offering just one category of Under Armour product, but multiple categories including footwear, accessories, and clothing for men, women, and children. This is also encouraging for investors, since it means Kohl's has found a brand its consumer base likes -- and is willing to spend money on.
Source: Fool.com