Kohl’s has struggled to reboot its business, despite being a value player in a market where consumers are looking for deals.
“The fact that comparable sales remain in decline — the eighteenth consecutive quarter when they have dipped — does not convince us that Kohl’s is a business in full recovery,” GlobalData Managing Director Neil Saunders told Market Screener, adding that Kohl’s is still losing market share across major categories.
CEO Michael Bender, however, believes his company has performed well, given the current operating environment.
“We are operating in a challenging macroeconomic environment where our customers are experiencing persistent financial pressures from inflation in their everyday expenses like gas and food. While their day-to-day priorities may change, the consumer is consistently looking for value, a compelling assortment, and an inspiring experience. The work we have underway is focused on addressing each of these customer priorities,” he said during the chain’s second-quarter earnings call.
Now, Kohl’s has made a major move to draw consumer attention by partnering with two huge names in the lifestyle world, Bobby Flay and Martha Stewart.
Kohl’s adds Bobby Flay and Martha Stewart lines
Kohl’s is introducing new Martha Stewart kitchen appliances and home fragrance in all stores nationwide and on Kohls.com, alongside updated Bobby Flay cookware arriving this fall.
“Designed for everyday cooking and entertaining, the new Martha Stewart appliances combine elevated design, practical functionality, and everyday value,” the company shared in a press release.
The lineup, which is available now, includes core kitchen electrics, including mixers, griddles, slow cookers, and milk frothers, as well as kettles, toasters, and a Kohl’s-exclusive coffee maker.
This fall, Kohl’s will also introduce an exclusive pomegranate colorway across select products, including the hand mixer, stand mixer, and slow cooker, arriving in time for the holidays.
More Retail:
- Home Depot is making a big bet on cautious consumers
- Another state just banned a controversial retail pricing practice
- JPMorgan just flagged a slow-build food crisis
Beyond kitchen electrics, the Martha Stewart lineup is also expanding into home fragrance with a new collection of candles.
The retailer will also expand its relationship with Food Network personality Flay.
“Known for bringing restaurant-inspired cooking to home kitchens, the Bobby Flay collection is growing this September to include multi-piece stainless steel and ceramic cookware sets, along with individual frying pans designed for even heating and easy cleanup,” the company shared.
Stars bring attention to retailers
Wharton marketing professor Barbara Kahn, director of the Jay H. Baker Retailing Initiative, explained how partnering with celebrities can help retailers.
“Retailers are in a difficult situation right now because the price of cotton is going up, as are labor and operating costs. But with private labels, they have many more pricing options and much more control over their brands,” she told Knowledge at Wharton.
“Attach a celebrity name to an exclusive store brand, and retailers get all that dazzle and panache along with all the profits. It’s a way to create excitement in the store, and make it special.”
Stephen Hoch, a Wharton marketing professor, thinks that these types of deals have grown in importance for retailers.
“This is just one of the ways we’re seeing that branding is more important than it used to be,” he said. “What is new is that retailers are doing it more often, and these exclusive lines represent a higher percentage of their sales than they ever have before.”
Related: Biggest sports bar chain closes locations before football season
Celebrity partnerships come with risks
Partnering with a famous name, however, does not guarantee success.
“First, the failure rate of celebrity brands remains high, often due to misalignments, consumer apathy, and other psychological patterns…. These failures incur financial and imagery losses as well as potential consumer backlash against celebrities and retailers that carry celebrity brands,” according to the academic paper “Star power on the shelf: the spillover effects of celebrity brand – retailer relationships on consumer evaluations of retailers Open Access.”
RTM Nexus CEO Dominick Miserandino thinks these deals can work, but notes that they come with significant downside.
“The risk is simple: celebrity names are a short-term traffic bump, not a long-term turnaround. Slapping a famous chef on a toaster gets people through the door once, but if the rest of the store still feels like a dated department store, those shoppers aren’t coming back for round two,” he told TheStreet.
Having unique offerings, however, has been a source of growth for Kohl’s.
“Our proprietary brands increased 3% in the second quarter. Over the past year, we’ve made significant progress enhancing our proprietary offerings, receiving a strong, positive customer response. We have driven major improvements by delivering exceptional value and increasing inventory depth by 6% to support better product availability,” Bender said during Kohl’s Q2 earnings call.
ALSO READ: Mattress chain files Chapter 11 bankruptcy after 24 years
