Like many retailers, consumers have spent money on more important necessities after experiencing the household goods boom during the epidemic and the clothing consumption wave that followed. At this time, Kohl’s realized that the company was overstocked with too many goods.
Reducing inventory, reducing costs and increasing efficiency run through the first quarter of Kohl’s fiscal year and have achieved results. Kohl’s inventory decreased by 6% year-on-year, and the clearance of some unsalable goods also made remarkable progress. Nevertheless, the company still believes that there is room for further improvement in clearance promotion. Tomkins Bury, CEO, said that Kohl’s previous practice of clearing autumn goods in February and March, and then clearing spring goods in August and September could not keep pace with the market, which was “too late”.
The sales of household goods in Kohl’s are becoming less and less existent. Tom Kingsbury believes that the reason for the poor sales of household goods in the first quarter is that the inventory of this category of goods was already at a low level at the beginning of the year, so it failed to expand sales performance in the clearance promotion. However, in fact, the sales of Kohl’s household products have turned into a continuous downward track since the first quarter of last fiscal year achieved a high growth of 30%, and the year-on-year sales of household products have dropped by as much as 17% in this quarter.
Compared with the whole industry, although the sales of household goods generally declined last year, most retailers still exceeded the level before the epidemic in 2019. Last year, Kohl’s sales of household products were only $2.75 billion, not only lower than before the epidemic, but also the worst performance in 15 years-Kohl’s last sales of household products were less than $3 billion, or in 2007, 15 years ago, when the annual sales were $2.97 billion, it was equivalent to $4.26 billion now if inflation was taken into account.
Kohl’s said that it will take measures to promote the procurement of key categories, and household items have entered the rescue list, when the inventory has been reduced to a minimum, with a profit of $14 million and no expected loss. Kohl’s refines the market demand for home categories, focusing on supporting home gifts, home accessories, pet products, holiday products and outdoor home categories.
CEO Tom Kingsbury said that the ordered goods are about to be delivered and the company is looking forward to good results in the third quarter.
Post time: Aug-15-2023