Kohl’s CEO Michelle Gass joins ‘Influencers with Andy Serwer’ to explain the company’s strategy to outlast the coronavirus and the tough decisions she was forced to make at the height of the pandemic.
ANDY SERWER: You mentioned how you’re changing the business this year, and of course, that brings us directly to COVID, because that’s accelerating the change or informing how you’re changing as well. And of course, you guys got hit big time like all the other retailers, and now you’ve been coming back. Talk about that whole process, Michelle, and how that’s going right now.
MICHELLE GASS: Yeah. Andy, it’s hard to imagine that was just seven or eight months ago that all of this happened and, you know, has changed the world as we know it. And for retailers like Kohl’s, even more significant of an impact, because we did our part in helping to slow the virus, and we’ll continue to do that. But our stores ended up being closed, the entire fleet, for seven weeks and, you know, some parts of our business closed for up to 17 weeks.
You know, that process, if I go back in time, and what that was like– you know, it’s interesting, Andy, March was going to be the time where we unveiled to our investors what our new direction of the company was. That literally was planned for March 16. And it was up until that week before that we were getting ready to– it had already moved from in-person to a webcast, but literally days before, where we saw the dramatic acceleration of what COVID was doing to society at large.
And so, literally in a matter of days, we decided to postpone our investor day. And on that day, specifically, March 16– that’s a day I’ll never forget– we were huddled, my leadership team and I huddled around a table in a conference room, figuring out and trying to interpret all the signals of what was happening in the country and in the world and how we were going to get through this period, with recognizing that 75% of our business, at some point, was probably going to be closed given all the unknowns around the virus.
So we set out two key priorities, which is first and foremost, doing our part to protect the safety of our people and our customers, and secondly, to ensure our financial viability and resilience through this process. So instead of being up in front of investors, we were figuring out what we needed to do to, like I say, put new procedures in place in our stores, assuming one day they’d be reopened, and of course, they were.
But then the financial decisions around reducing expenses and ensuring we had the adequate liquidity, so upsizing our revolver, you know, getting more capital from the markets, et cetera. And it was great to be on the other side. And our balance sheet– we entered this period with a strong balance sheet, and it continues to be the case today. And I would say once we did get back our stores up and running, obviously our liquidity dramatically improved, and we have now paid back that full $1.5 billion revolver.
But that period of time, it was really a defining moment for the company and the team on how we so quickly could galvanize, do the right thing, in our– like I said, our role for the greater good, the right thing for our people, but make really tough, tough decisions, unimaginable decisions that I never thought I would face to get through that period.