Customers shopping for jackets at Kohl’s. Photo: Kohl’s

In recent months, retail clothing store sales have been rapidly declining. Well-known brands such as Kohl’s and Old Navy have been particularly struggling; in the first quarter, Kohl’s sales dropped by 5.2%, while Old Navy’s sales dropped by 13%. Supply chain issues and the rapidly growing inflation are not doing any favors.

Kohl’s has had a rough start to 2022. In early May, Kohl’s chief merchandising officer Doug Howe left Kohl’s. Chief marketing officer Greg Revelle left Kohl’s on June 1, and Chief Technology and supply chain officer Paul Gaffney left on Aug 1. With the changes in leadership, the merchandising team has created issues for the company. “[Kohl’s] has lost the plot in terms of merchandising and range planning and appears to be taking a seemingly random approach to buying. The result is a jumble of disjointed products in stores,” said GlobalData retail analyst and managing director Neil Saunders.

Additionally, there is a major inventory problem. The company is sitting at 48% more items than it had at the same time last year. Kohl’s Chief Executive Officer Michelle Gass attributes this issue to high inflation rates; the higher cost of products is making shoppers less eager to purchase items. As it currently stands, the company is expecting annual sales to drop around 5-6%.

Unfortunately, Old Navy has not seen much success either. Similar to Kohl’s, Old Navy is sitting at 34% more inventory than it had last year; an unsuccessful inclusivity campaign created major inventory issues. Last summer, Old Navy did away with the plus-size section and, instead, offered all women’s clothing from 0-30. Additionally, larger outfits no longer cost more than other articles of clothing. The company overestimated consumer demand for larger sizes and was left with a $162 million loss.

The future for both Kohl’s and Old Navy is looking more positive. Kohl’s partnership with Sephora back in Dec. 2020 is turning out to be very successful. With more than 200 Sephora at Kohl’s stores, the company has seen an increase of more than 1 million customers. Kohl’s plans on having 600 Sephora shop-in stores by the end of 2022.

Old Navy is also finding ways to combat the low sales. “We are packing and holding fashion inventory that we can sell next year,” said Chief Financial Officer Katrina O’Connel. The company has successfully implemented this strategy after the pandemic and looks to try it again. 

Additionally, the company looks to open 30-40 more Old Navy stores in the next year.

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