Kohl’s seems to be the latest victim of the changing market. The American department store retail chain seems to be facing a few important challenges, which, each on its own, they could weather with ease, but all at once are proving a lor harder to manage. The current economic crisis is not helping the American consumers and commerce, and survival of the fittest means that there is always someone behind you striving to take your place, and in this case, Costco seems to have the upper hand.
Kohl’s problems are not unique, they are now undergoing a leadership change (for those familiar, Costco underwent one last year, but they seem to have come out ahead a lot cleaner from this process) and the transition is not as smooth as the company would like. Unlike other companies, Kohl’s fired their CEO Ashley Buchanan, which was not a good look. The firing was justified, even though Buchanan had only been on the post since January, but Kohl’s announced in a regulatory filing with the Securities and Exchange Commission that an internal investigation found Buchanan had directed the company to “conduct business with a vendor founded by an individual with whom Mr. Buchanan has a personal relationship on highly unusual terms favorable to the vendor.”
Since Buchanan’s firing, Michael Bender, chairman of the board since May 2024, has taken over operations until a permanent replacement is found.
While this alone would be enough to shake up a company, in a year like 2025 where tariffs imposed on China have been driving the country and the economy insane and changes in politics have made investing in anything related to a company unstable due to the market instability, Kohl’s problems have done nothing but start.
The other problem Kohl’s is facing, a severe decrease in revenue that Costco is profiting from
Although no one would dare call Kohl’s a small retail chain, after all they now have more than 1,160 locations spread out in every state except Hawaii, they do not seem to be as well known as some of their direct competitors like Walmart, Target, or even Costco, although all of them seem to target similar demographics as clients. This may have become a problem as of late, as their lack of defined branding and recognition may have accelerated a loss of market share in these tense economic times.
Just in the previous twelve months their total revenue has dropped 4.1%, leaving their previous $3.23 billion earnings behind. While they managed to weather the pandemic with little losses, the changes in the market in the post pandemic world seem to have caught up with them and not in a good way.
But this is leaving a space in the market for their competitors, and there is one that is eagerly coming behind them. The saying that major crises often reveal new opportunities has become something of a cliché in the corporate world, but in this case, it is proving true. Costco is capitalizing on its competitor’s instability by leaning into a strategy that has consistently worked: a membership-based, wholesale model that drives steady revenue and builds strong customer loyalty.
By maintaining low prices and delivering a satisfying shopping experience, Costco continues to stand out. While Kohl’s grapples with serious financial strain, Costco is not only stable but expanding, launching new locations across the U.S. and refining its services. With growing dissatisfaction among Kohl’s customers, Costco sees a clear path to attracting more of them. The retail landscape is becoming more competitive, and Costco appears increasingly well-positioned to take the lead. Hopefully the company will manage to overcome these challenges and succeed.