Menomonee Falls, Wisconsin – In a stunning development, Kohl’s Corporation announced the termination of Chief Executive Officer Ashley Buchanan on Thursday, May 1, 2025, just four months after he assumed the role, following an investigation that uncovered violations of the company’s ethical standards. The abrupt dismissal, attributed to undisclosed conflicts of interest in vendor transactions, marks a significant setback for the struggling department store chain as it battles declining sales and intensifying competition. This article, based on reports from CNN, CBS News, and NBC Chicago, explores the circumstances surrounding Buchanan’s exit, its implications for Kohl’s, and the broader context of the retailer’s challenges in a rapidly evolving retail landscape.
Ashley Buchanan, 50, took the helm at Kohl’s on January 15, 2025, succeeding Tom Kingsbury, who had served as interim and then permanent CEO following Michelle Gass’s departure in 2022. Buchanan, previously the CEO of arts-and-crafts retailer Michaels, was hailed as a retail veteran with a track record of driving operational efficiency and customer engagement. His appointment was seen as a pivotal moment for Kohl’s, which has struggled to regain its footing amid a shifting retail environment dominated by e-commerce giants like Amazon and big-box competitors like Walmart and Target.
Buchanan’s mandate was clear: reverse Kohl’s declining sales, streamline operations, and reposition the brand to appeal to a younger, value-conscious demographic. The company, one of Wisconsin’s largest retailers with approximately 1,100 stores across 49 states, had reported a 9.4% sales drop and a 74.2% profit decline in the fourth quarter of 2024, reflecting broader challenges in the department store sector. Buchanan’s strategic vision included expanding Kohl’s partnerships, such as its in-store Sephora shops, and enhancing its loyalty program to drive customer retention.
However, Buchanan’s tenure was cut short when an external investigation, initiated by Kohl’s Board of Directors, revealed that he had engaged in business dealings that violated the company’s code of ethics. Specifically, the probe found that Buchanan directed Kohl’s to enter vendor transactions that involved undisclosed conflicts of interest, though the company did not disclose further details. Kohl’s emphasized that the termination was unrelated to its financial performance, operational results, or other personnel issues, underscoring that the decision was solely based on ethical misconduct.
The Board’s Swift Response
The decision to fire Buchanan was unanimous, reflecting the board’s commitment to upholding Kohl’s ethical standards. In a statement, the company noted that the investigation was conducted by an independent third party, ensuring objectivity. The board’s swift action suggests a desire to mitigate reputational damage and maintain investor confidence, particularly given Kohl’s recent leadership instability. Buchanan’s dismissal marks the third CEO change in three years, following Gass’s exit to Levi Strauss & Co. and Kingsbury’s transitional tenure.
To fill the leadership void, Kohl’s appointed Michael Bender, a current board member with extensive experience in retail and operations, as interim CEO. Bender, who joined the board in 2021, previously served as chief operating officer at Walmart and held senior roles at Cardinal Health. His appointment is seen as a stabilizing move, with the board expressing confidence in his ability to guide Kohl’s through the transition. The company has launched a search for a permanent CEO, engaging a leading executive recruitment firm to identify candidates with a proven track record in retail transformation.
Financial Context and Market Reaction
Despite the leadership turmoil, Kohl’s reported encouraging preliminary first-quarter earnings for 2025, which provided a silver lining amid the controversy. The company announced that its financial performance exceeded expectations, driven by improved inventory management and strong sales in its Sephora partnership and private-label brands. This news triggered a nearly 9% surge in Kohl’s stock price on Thursday, offering temporary relief to investors. However, the stock remains down 70% over the past year, reflecting ongoing concerns about the retailer’s long-term viability in a competitive market.
Kohl’s financial struggles are not unique to Buchanan’s tenure. The department store sector has faced significant headwinds, with consumers increasingly favoring online shopping and discount retailers. In 2024, Kohl’s reported annual revenues of approximately $17.3 billion, a decline from $18.1 billion in 2023, with net income plummeting to $317 million from $1.2 billion two years prior. The company’s fourth-quarter 2024 results were particularly grim, with same-store sales dropping 8.2% and profit margins shrinking due to heavy discounting to clear excess inventory.
Buchanan’s brief leadership included efforts to address these challenges. He introduced initiatives to enhance Kohl’s digital platform, streamline supply chain operations, and expand its home goods category to compete with rivals like Macy’s and JCPenney. However, these strategies had yet to yield significant results, and his ethical lapse overshadowed any progress. Kohl’s is now preparing to release its full first-quarter results on May 29, 2025, which will provide further insight into its financial health and strategic direction under interim leadership.
Buchanan’s Compensation and Fallout
Buchanan’s compensation package was a point of contention, given his short tenure. Upon joining Kohl’s, he received a base salary of $1.4 million, stock options, performance-based bonuses, and a $2.5 million signing bonus, totaling over $20 million in potential value. This made him one of Wisconsin’s highest-paid executives in 2025, a fact that drew scrutiny amid Kohl’s cost-cutting measures, which included reducing corporate staff and closing underperforming stores.
As part of his termination agreement, Buchanan is required to repay a prorated portion of his signing bonus and forfeit all unvested equity awards, including restricted stock units and performance shares. The financial penalty underscores the severity of his ethical violations and Kohl’s intent to hold executives accountable. Buchanan has not issued a public statement regarding his dismissal, and attempts to contact him for comment were unsuccessful.
Kohl’s Broader Challenges
Buchanan’s exit compounds Kohl’s ongoing challenges, which extend beyond leadership turnover. The retailer operates in a fiercely competitive environment, with e-commerce giants capturing market share and changing consumer preferences favoring convenience and value. Kohl’s has attempted to differentiate itself through strategic partnerships, notably its Sephora shop-in-shop model, which now operates in over 900 stores and has driven significant foot traffic. The company also expanded its Amazon returns program, allowing customers to return Amazon purchases at Kohl’s locations, a move that boosted in-store visits but failed to translate into consistent sales growth.
Additionally, Kohl’s has faced pressure from activist investors urging a sale or restructuring. In 2022, the company rejected multiple takeover bids, including one from Franchise Group valued at $8 billion, citing undervaluation. These dynamics have kept Kohl’s in a state of flux, with analysts questioning its ability to execute a sustainable turnaround without stable leadership.
The retailer’s customer base, primarily middle-income families, has been squeezed by inflation and rising interest rates, reducing discretionary spending on apparel and home goods. Kohl’s reliance on promotions has eroded profit margins, and its loyalty program, while popular, has not fully offset the loss of market share to competitors like Target, which offers a broader product range and a stronger online presence.
Interim Leadership and Future Outlook
Michael Bender’s interim role is critical as Kohl’s navigates this turbulent period. His experience at Walmart, where he oversaw global supply chain operations, positions him to address Kohl’s logistical challenges, such as inventory overhang and distribution inefficiencies. Bender has pledged to maintain focus on the company’s strategic priorities, including expanding its Sephora partnership, enhancing its digital platform, and improving customer experience through personalized marketing.
The search for a permanent CEO will be a defining moment for Kohl’s. Analysts suggest the company needs a leader with a bold vision to reposition the brand, potentially by diversifying into new product categories or accelerating its e-commerce transformation. Potential candidates could include executives from successful omnichannel retailers or leaders with experience in turnaround situations.
Kohl’s leadership transition comes at a time when the broader retail sector is grappling with uncertainty. The rise of fast-fashion players like Shein and Temu, combined with Walmart’s aggressive pricing, has intensified pressure on traditional department stores. Kohl’s must also contend with macroeconomic challenges, including potential trade disruptions stemming from U.S. policy shifts under President Donald Trump’s administration, which could increase costs for imported goods.
Sources: CNN, CBS News, NBC Chicago
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