MAJOR U.S. RETAILER WARNS OF 2025 ECONOMY, ANNOUNCES CLOSINGS
THE DETAILS …
Kohl’s, the well-known Wisconsin-based department store chain with over 1,100 locations nationwide, has announced a significant downward revision of its sales expectations for 2025, signaling potential economic challenges ahead. The company now anticipates a sales decline of 5 to 7 percent, a stark contrast to earlier projections, driven by disappointing back-to-school and holiday shopping seasons. This gloomy forecast, released alongside quarterly financial results ending February 1, revealed a profit of $48 million, a steep drop from the $186 million reported in the same period the previous year, causing the company’s stock to plummet by more than 26 percent in a single day.
To address the projected downturn, Kohl’s is taking decisive steps to streamline its operations, including the closure of dozens of underperforming stores. The company has already planned to shutter 27 locations across 15 states by April 1, a move former CEO Tom Kingsbury described as a difficult but necessary action to ensure the long-term health of the business. These closures are part of a broader strategy to adapt to shifting consumer spending patterns, with comparable sales expected to drop by 4 to 6 percent, exceeding Wall Street’s more optimistic predictions of a slower decline, highlighting the severity of the challenges Kohl’s faces in the current retail landscape.
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The struggles at Kohl’s are not isolated, as the retailer joins a growing list of major chains bracing for sales slowdowns amid widespread fears of an economic recession in 2025. Other retail giants, including Walmart, Best Buy, and Target, have similarly warned of cost pressures and reduced consumer spending, reflecting broader economic concerns following years of inflation in sectors like groceries, vehicles, and housing. Amid these challenges, Kohl’s is also undergoing a leadership transition, with Ashley Buchanan, a seasoned executive from Walmart and Sam’s Club, stepping into the CEO role in January, while Kingsbury moves to an advisory position, signaling a potential shift in strategy to navigate the turbulent retail environment.