Kohl’s CEO to retire in May; successor named
Kevin Mansell, chairman, CEO and president of Kohl’s, will retire in May 2018 at the end of the company’s annual shareholders meeting. The 35-year Kohl’s veteran has served as its chief executive for nearly 10 years.
Michelle Gass, currently Kohl’s chief merchandising officer and customer officer, will assume the CEO role upon Mansell’s retirement. Sona Chawla, Kohl’s COO, will assume the role of president. The Kohl’s board said it plans to appoint one of its independent members as chairman to replace Mansell in that role.
Gass joined Kohl’s in 2013 as chief customer officer, with responsibility for marketing and the e-commerce business. In 2015, her role expanded to also include chief merchandising officer. Prior to Kohl’s, Gass spent nearly 17 years at Starbucks where she held a variety of leadership. She began her career with Procter & Gamble.
Chawla joined Kohl’s in 2015 as COO. Previously, she spent seven years with Walgreens in a variety of senior leadership roles including president of e-commerce and president of digital and chief marketing officer. Prior to joining Walgreens, she was VP of global online business at Dell.
In the 35 years that Mansell has been with Kohl’, the company has grown from a local Milwaukee-area retailer with a dozen locations to a national retailer with more than 1,100 stores across 49 states, with annual sales of $19 billion. During Mansell’ tenure as CEO, the company, among other accomplishments, significantly expanded its brand portfolio and grew its e-commerce business to $3 billion. Most recently, he led the retailer into a closer relationship with Amazon. Kohl’s will begin accepting (and shipping back) Amazon returns at 82 stores beginning next month.
“I look forward to this last year of my career, building on the positive momentum we have going into the holidays, furthering the development of our operational excellence and traffic-driving plans and ensuring a seamless transition for our associates, partners and shareholders,” said Mansell.
In his remarks, Mansell praised his newly appointed successor.
“Michelle has been an instrumental leader in shaping the future at Kohl’s – one where we continue to put the customer first, focus on innovation, speed and agility and remain dedicated to the long-term financial health of the business,” he said. “Michelle’s leadership of our merchandise and marketing organizations has proven her talent, passion, vision and readiness to lead our organization. The retail industry is going through a transformational amount of change and Michelle is extremely well qualified and positioned to lead Kohl’s through this evolution.”
In assuming the role of president, Chawla will maintain her responsibilities for the company’s omnichannel operations including all store operations, logistics and supply chain network, information and digital technology, and e-commerce strategy, planning and operations.
“Sona’s leadership has significantly impacted our ability to become a best-in-class omnichannel retailer,” said Mansell. “She has been laser-focused on delivering a seamless omnichannel customer experience, leveraging technology to make us more productive, and amplifying the role and relevancy of our stores as our biggest strength.”
Regulatory Wrap-Up: A $15/hour wage increase approved for 2018 ballot in Massachusetts
Massachusetts: A joint committee held a hearing on a bill that would increase the minimum wage by $1/hr. each year until it reaches $15/hr. in 2021. The bill would also phase out the tip credit over an eight year period. The legislature may feel more pressure to act now that a $15/hr. wage increase has been approved for the 2018 ballot.
St. Paul, MN: Local advocates are seeking to follow Minneapolis and are ramping up efforts in support of a local $15/hr. minimum wage proposal. The bill has yet to come before the seven member city council. Unlike their close neighbor Minneapolis, St. Paul officials have yet to voice public support for a wage increase.
Rhode Island: A paid leave bill passed both the house and senate. It mandates that companies with more than 18 employees provide three days of sick leave starting next year, four days in 2019 and five days from 2020 onward. One hour of paid leave is accrued for every 35 hours worked under the new requirement. The governor is likely to sign the bill into law.
Minneapolis, MN: The Minnesota Court of Appeals upheld the lower court’s ruling in favor of the city’s paid sick leave mandate. The business coalition in an effort to overturn the city law will seek an appeal to the state supreme court. Other cities, such as Duluth that are considering similar ordinances, are watching the proceedings closely.
TGI Friday’s: TGI Friday’s settled a wage theft class action lawsuit for $19 million this week. The settlement, which covers 28,000 restaurant workers, is a record amount for resolution of a wage theft lawsuit in the restaurant industry.
California: A bill that prohibits employers from asking applicants about their salary history and also requires employers to provide upon request a pay scale related to specific positions passed the legislature and awaits the governor’s signature.
CEO Pay: Recent reports indicate that senior officials within the Securities and Exchange Commission (SEC) confirmed that the SEC CEO pay ratio rule will not be rescinded and that publicly traded companies should plan to comply with the existing rule. These reports conflict with comments earlier this year from the SEC Chairman who expressed opposition to the rule. The rule, passed in 2015 with an effective date of Jan. 2018, requires public companies to compare the compensation of their chief executive officer to the median compensation of their other employees.
E-Verify: A federal proposal to mandate that employers use the E-Verify system to confirm the legal status of new employees was introduced this week. In the past several years business groups, such as the U.S. Chamber of Commerce who once opposed the federal mandate, now support a law that would preempt the various iterations of state E-Verify laws and provide a safe harbor provision for employers. Despite that support, it is unclear if the measure will attract enough votes to become law.
EEOC: A U.S. Senate committee held a hearing on two of President Trump’s nominees for the Equal Employment Opportunity Commission, the agency that enforces workplace discrimination laws. Former corporate general counsel, Janet Dhillon has been nominated to chair the committee and Iraqi war veteran Lt. Col Daniel Gade has been nominated for one of the open commission seats.
Wisconsin: The state appeals court agreed with a federal appeals court decision which upheld the state’s right-to-work law.
West Virginia: The state supreme court overturned a lower court’s injunction of the state’s 2016 right-to-work law. In addition to other issues, the higher court cited the delay in a final decision from the lower court judge. Opponents vowed to continue the case and exhaust all legal options to overturn the law.
Washington D.C.: As the city council reconvenes after their summer break, Chair Phil Mendelson, who sets the council’s agenda, proposed a moratorium on “bills that would negatively affect businesses” through the end of 2018. In recent years the city passed a $15/hr. minimum wage, a paid sick leave requirement, a parental leave law and has considered a scheduling mandate modeled after San Francisco’s law.
NLRB: President Trump announced the nomination of management-side attorney Peter Robb to serve as the next general counsel for the National Labor Relations Board. The NLRB General Counsel determines which cases come before the board for a vote. Meanwhile, the senate is expected to vote next week to confirm Bill Emanuel who President Trump nominated for the fifth open seat on the board. Once Emmanuel is confirmed, as expected, Republicans will enjoy a 3-2 majority vote on the board for the first time in a decade. It is expected that several labor-friendly decisions such as joint employer liability and micro union organization will be rolled back.
U.S. Senate: Several Republican senators have reinvigorated an effort to repeal the Affordable Care Act. The proposal, authored by Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA), seeks to replace much of Obamacare with block grants for states. Further details remain undisclosed and a cost analysis has yet to be released. A Sept. 30 deadline for the U.S. Senate to pass a repeal with a simple majority vote is increasing the pressure for action; however, Senator John McCain (R-AZ) announced his opposition to the bill late last week, joining a number of other Republicans and dealing a blow to the legislation that requires 51 votes in the Senate to pass. Leader McConnell announced they would vote on the bill this week, but if Republicans lack a majority, they are not likely to take it up.
NAFTA: The Trump administration officially notified Congress of potential changes to NAFTA proposals. This procedural step starts a 180-day clock. After that period, the President can sign a new agreement, but it will still require final, Congressional approval. The notice comes as the three country talks continue in Canada this week for the third of seven expected rounds of negotiations. Reports indicate that little progress has been made on any of the controversial issues and the US is expected to insert a 5-year sunset proposal which could further complicate the negotiations.
KORUS: South Korea and the United States agreed to hold a second round of talks over the bilateral free trade agreement known as KORUS.
California: Legislation establishing California as a sanctuary state passed both chambers and is awaiting signature by the Governor. Among other provisions, the law limits communication between state and local law enforcement and federal officials regarding the immigration status of undocumented residents. It would also prevent law enforcement from questioning and holding people on immigration violations. While the direct impact on restaurant and retail operators is minimal, the political stance of the 8th largest economy in the world, which is in direct contrast to the federal government, is notable.
California: A bill that prevents companies from allowing federal immigration agents on private property without a judicial warrant reached the governor’s desk. It would also require employers to notify workers of ICE enforcement activity within 72 hours of receiving notice of the inspection.
San Francisco, CA: A first-of-its-kind labeling mandate was blocked by the 9th Circuit Federal Appeals Court this week. It required soda advertisers to devote 20% of their display ads to include a warning that states this drink “contributes to obesity, diabetes and tooth decay.” The court found that the city could not compel advertisers to convey warnings on their products unless they were “clearly factual” as is the case with tobacco product’s linkage to cancer.
St. Helens, OR: City staff has proposed a 1 to 2 cent per ounce excise tax on sugar-sweetened beverages, like soda, as a revenue-generating idea. The local chamber for the Portland suburb has come out against the proposed excise tax.
Multnomah County, OR: Advocates are beginning to collect signatures to put a soda tax on the May 2018 ballot. The soda tax initiative seeks to add a 1.5 cents per ounce, or about 18 cents to the cost of a 12 ounce can of soda, energy drink or sweet tea. Canvassers are seeking 18,000 signatures from residents in the county, which includes the city of Portland in order to place the tax on the ballot.
California: The Broadband Privacy Act that was pending in the state legislature failed to move forward before the close of session last week. The bill would have forced internet service providers to obtain permission from users prior to the collection of personal information. The bill is dead for this year but could resurface in 2018. Supporters are also working to place the California Consumer Privacy Act of 2018 on the ballot. The initiative would allow a customer to request what personal information a business has collected, how the business is using the information and direct businesses to not use that information.
• TGI Friday’s record-setting $19 million dollar wage theft settlement puts the restaurant industry, and to some extent the larger entry level employment community, squarely in the crosshairs of regulators, attorneys general and the plaintiffs’ bar. Expect copycat class action lawsuits to emerge, targeting other companies. Activist regulators and attorneys general will also be encouraged to target brands in an effort to garner headlines.
• The Washington D.C. Council Chairman’s announcement of a moratorium on employment and workplace policies indicates the local dialogue has shifted from a political conversation to an economic one, which is an important development. Even in one of the more progressive city councils in the country, policymakers understand that the combined impact of steep increases in multiple mandates – paid sick leave, parental leave, minimum wage – in a short time period may be too much for local businesses to bear. For employers in activist jurisdictions, this should illuminate a path forward.
Legislature Status for Week of 9/18/17
• The United States Senate is in session this week
• The United States House is in session this week
• Ten state legislatures are currently in annual session
o IL, MA, MI, NJ, NC, NY, OH, PA, RI, WI
The Regulatory Wrap-Up is presented by Align Public Strategies. Click here to learn how Align can provide your brand with the counsel and insight you need to navigate the policy and political issues impacting retail.
Teen apparel retailer emerges from Chapter 11
Rue21 is looking towards the future.
The retailer announced Friday that it has completed its financial restructuring and has emerged from bankruptcy. The chain filed for Chapter 11 bankruptcy protection in May 2017, listing $307 million in pre-petition assets. It filed a month after it said it would close 400 stores.
"We are pleased to be moving forward with rue21's next chapter of growth as a highly performing and distinctive retailer," said Melanie Cox, CEO of rue21.
Rue21 currently operates 758 stores in 45 states in shopping malls, outlets and strip centers, and on its website.