2019 Top 100 Retailers Power Players: Mass Apparel

0

“Consumers are seeking value-oriented retailers offering attractive and acceptable quality merchandise,” says Monica Aggarwal, primary industry analyst at Fitch’s Rating Service. “In addition, apparel purchases have been rapidly moving online, putting significant pressure on in-store sales,” she says.

“While leading players such as Kohl’s have been able to largely offset decline in in-store sales through the growth in their ecommerce businesses, retailers are forced to invest heavily in omnichannel platforms, which have driven down EBITDA [earnings before interest, taxes, depreciation and amortization]margins and reduced cash flow.”

The outlook for Kohl’s is positive, Aggarwal says; Fitch believes Kohl’s multi-year investments in areas such as developing omnichannel capabilities, store remodels, growing its national brand presence and increased activewear penetration should allow it to grow sales and compete more effectively.

There are numbers to support this position. Online sales accounted for just over 20 percent of Kohl’s sales in 2018 versus 5 percent in 2011. Mobile represented the majority of its traffic growth at over 70 percent of digital traffic and more than half of digital sales in 2018, supported by investments in the mobile app, Your Price, personalized search, Smart Cart and fulfillment such as buy online, pick up in store and buy online, ship from store.

Kohl’s CEO Michelle Gass is working to expand the role of bricks-and-mortar locations. The retailer is working with Planet Fitness to install small gyms in 10 Kohl’s stores: About 20 percent of Kohl’s sales are generated by workout apparel and other health and wellness gear, Gass says, and the segment has more than doubled over the last four years. She sees it as becoming “even more important” in the immediate future.

March Marcho/Shutterstock.com

Share.

Comments are closed.