US department store retail chain operator Kohl's Corp announced that it will be removing eight brands from its shelves, including some of its iconic women's apparel names such as Jennifer Lopez, Popsugar, and Juicy Couture. The decision was made in light of the company's poor earnings results to far this year, which had been affected by the slump in demand due to the coronavirus pandemic.
One of the country's largest department store chains, with over 1,158 locations nationwide, was heavily affected by the spread of the coronavirus pandemic. Kohl's chief executive officer, Michelle Gass, mentioned during the company's latest earnings call that its financial performance throughout the rest of the year will likely be materially impacted by the pandemic, which is why it had decided to dump some of its underperforming brands.
Gass told stakeholders that exiting the eight brands should allow the company to better focus on its more profitable brands. The executive clarified that despite the removal of the brands, Khol's still remains highly committed to its women's apparel business.
Apart from its Jennifer Lopez brand, which the company had established together with the iconic singer more than a decade ago, Khol's will also be dropping its Juicy Couture brand. Other brands that will no longer be available in its stores are its Dana Buchman, Rock and Republic, Elle, Mudd, and its Candie's brands.
For its first-quarter ending on May 2, Khol's reported a drop in its net sales of about 44 percent to $2.16 billion. For the quarter, the company reported a net loss of $541 million. Khol's attributed the poor performance to the shutdown of its outlets during the pandemic to help mitigate the spread of the virus.
Due to the slump in demand and its store closures, Khol's share prices have fallen by more than 8 percent. For its latest quarter, Khol's did report a slight uptick in its online sales of more than 24 percent as customers flocked to its online stores amid the shelter-in-place orders and lockdowns. Online sales surged the most in April, to about 60 percent.
The company has since reopened more than half of its stores across the US as restrictions were eased earlier in the month. Thanks to its strong balance sheets, Khol's was able to escape the fate of other US retailers who have since filed for bankruptcy. So far, J. Crew, JC Penny, and Neiman Marcus have already filed for bankruptcy protection after incurring massive losses and debt in the months since the US forced them to close their stores.
