Kohl’s Chief Executive, Michelle Gass, Will Depart to Join Levi’s

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Kohl’s chief executive, Michelle Gass, is leaving the department store chain next month to become president of Levi Strauss & Company, and eventually succeed its longtime leader, Chip Bergh.

Ms. Gass is departing Dec. 2, and her exit after four years in Kohl’s top post will come in the middle of the critical holiday season. Levi’s said on Tuesday that Ms. Gass would replace Mr. Bergh, who has led the company since 2011, as chief executive within the next 18 months.

Mr. Bergh said the choice of his successor would help define his legacy at Levi’s, and he expressed confidence that Ms. Gass was the right person for the role.

“She has a track record of building brands and talent,” Mr. Bergh said in a statement. He has been focused on making sure the Levi’s signature denim jeans still holds cultural resonance with the increasingly important Generation Z shopper.

During her tenure at Kohl’s, Ms. Gass started a number of initiatives to bolster sales and help transform the retailer’s image as a destination for millennial parents and Gen Z consumers. She oversaw the introduction of the Amazon returns program, which allows shoppers to walk into a Kohl’s store and drop off goods purchased through the online retailer. Kohl’s has said that customers tend to stay around to shop at its stores after making an Amazon return.

It is also testing a smaller footprint for its stores, and opened a 35,000-square-foot store in Tacoma, Wash., last month. A typical Kohl’s is around 80,000 square feet.

Kohl’s has put huge emphasis on its partnership with Sephora, which will have 600 shop-in-shops in Kohl’s stores by the end of the year and plans to open 250 more in 2023. Kohl’s sees the partnership generating $2 billion in annual sales by 2025.

Ms. Gass joined Kohl’s in 2013, after a long tenure at Starbucks, where she was credited with creating the Frappuccino and its caramel drizzle. Kohl’s praised her efforts to reshape the company for a younger generation of shoppers.

“Under her leadership, the company has driven a strategic transformation, expanded its partnerships and brand portfolio, and supported an inclusive and collaborative culture,” Peter Boneparth, Kohl’s chairman, said in a statement.

Still, the department store chain faces challenges. The retailer’s core shoppers — middle-income Americans — have faced intense pressure from inflation on a range of items and have pulled back on buying discretionary items like apparel.

Kohl’s announced preliminary third-quarter results on Tuesday. The retailer said same-store sales fell 6.9 percent and its operating margin was 4.7 percent. It said it would release full quarterly earnings on Nov. 17.

Tom Kingsbury will be interim chief executive of Kohl’s while the company looks for a permanent leader.

Kohl’s stock price has dropped 46 percent since the beginning of the year, and the retailer has been under pressure to improve its financial fortunes. In January, it was pushed by a handful of activist investors to sell itself.

Levi’s, which began being publicly traded in 2019, has seen its stock price fall 38 percent since the start of the year.