Kohl’s CEO Michelle Gass, along with Andy Serwer, explains the company’s strategy to outlast the coronavirus and the tough decisions she had to make at the height of the pandemic.
ANDY SERWER: You mentioned how you are changing the business this year and of course that brings us straight to COVID as it accelerates the change or tells you how you are changing too. And of course, like any other retailer, you’ve been very affected and now you’ve come back. Talk about this whole process, Michelle, and how it’s going now.
MICHELLE GASS: Yes. Andy, it’s hard to imagine that all of this only happened seven or eight months ago and changed the world as we know it. And for retailers like Kohl’s, that’s an even bigger impact as we’ve done our part in slowing the virus down, and we will continue to do so. But our stores were closed for seven weeks, the entire fleet, and some parts of our store were closed for up to 17 weeks.
You know, this process, when I go back in time and what it was like – you know, it’s interesting Andy, March was the time we revealed our new direction for the company to our investors. That was literally scheduled for March 16th. And it was until this week before we prepared – it had already moved from personal to webcast, but literally days before that, where we saw the dramatic acceleration of COVID, society at large did.
And so, literally within a few days, we decided to postpone our investor day. And on that day, specifically March 16 – this is a day I’ll never forget – we were huddled together, my leadership team and I huddled around a table in a conference room trying to figure out all the signals of what was going on interpret It happened in the country and in the world and how we would get through this period realizing that 75% of our business would eventually be closed, given all the unknowns surrounding the virus.
That is why we have identified two main priorities, one of which is to help protect the safety of our employees and our customers first and second, to ensure our financial viability and resilience through this process. Instead of standing in front of investors, we thought about what we need to do to, as I said, introduce new practices in our branches, assuming they reopen one day, and of course they were.
But then the financial decisions to cut spending and make sure we have enough liquidity to upgrade our turret and get more capital from the markets, etc. And it was great to be on the other side. And our balance sheet – we entered that period with a strong balance sheet, and this is still the case today. And I would say that once we get our businesses back on track, obviously our liquidity has improved dramatically and we have now paid back the full $ 1.5 billion revolver.
But at that time it was really a defining moment for the company and the team, how we could electroplate so quickly and do the right thing, in our – as I said earlier – role for the common good, right for our people, but meet you really hard, hard decisions, unimaginable decisions that I never thought I would face this time.