Influencers with Andy Serwer: Michelle Gass

In this episode of Influencers, Andy speaks with Kohl's CEO Michelle Gass about the state of the retail industry, how Kohl's plans to survive the pandemic, and the company's strategic partnership with Amazon.

Video Transcript

- They said the pandemic was the final nail in the coffin for brick and mortar retailers. Many closed their doors for good. Others filed for bankruptcy. But in the midst of chaos, there is also opportunity.

Michelle Gass first joined Kohl's more than seven years ago, signing on as the company's first chief customer officer, and quickly rising up the ranks until 2018 when she was named the company's CEO. Now Gass is leading Kohl's through the most challenging period in the company's history.

She's betting big on strategic new partnerships and has outlined a new plan to navigate the COVID crisis. In this episode of "Influencers," I speak with Michelle Gass about the future of e-commerce, teaming up with one of the world's largest retailers, and why she says the coronavirus presents a unique opportunity for Kohl's.

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Hello, everyone, and welcome to "Influencers." I'm Andy Serwer. And welcome to our guest, Michelle Gass, the CEO of Kohl's. Michelle, nice to see you.

MICHELLE GASS: It's good to see you, Andy.

ANDY SERWER: So you're at headquarters up in Wisconsin, right?

MICHELLE GASS: I am-- Menomonee Falls, Wisconsin.

ANDY SERWER: So I want to talk to you about everything that's going on. First of all, let's talk a little bit about Kohl's. Because everyone knows what Kohl's is, one of the largest stores in the United States. But they might not really understand-- well, niche is maybe not the right word 'cause you're so big, but what space you guys fill. What is Kohl's exactly, then, Michelle?

MICHELLE GASS: Yeah. Well, to your point, Andy, let me just talk about Kohl's, our company, and our brand; and then talk about the exciting pivot that we're making as a business. So first of all, as you said, I hope everybody knows Kohl's. But we do serve American families literally coast to coast. We're in 49 states.

We serve about 65 million customers. One out of every two American households actually shop Kohl's. We have a very big loyalty program, about 30 million members. And a fun stat that we like to share is that 80% of Americans live within 15 miles of a Kohl's. And that's within our store fleet. So we have close to 1,200 stores.

But we also have a growing e-commerce business that last year penetrated about 25% of our business. Obviously in this time, it's penetrating a lot more. But it has been a terrific growth engine for the company.

Historically, Andy, to your question-- well first of all, I would say from the very beginning and the heritage of the company, we've been all about families. So we serve families, diverse families. And we're all about meeting their needs.

And we have a great purpose statement. We're very much a purpose-driven company. And our purpose is to inspire and empower families to lead more fulfilled lives. And that's true to the DNA. And so we sell lots of categories to accomplish that.

But we are very customer-oriented. I mean, we put our people and our customers at the center of everything we do. And customer needs and family needs have been changing. They've been changing over the last few years. And that's accelerated during this time, this period of COVID.

And so I'm sure we'll talk more about this. But the punch line for Kohl's is that we are gonna be evolving our business and our brand to stand much more for the active and casual lifestyle and how American families are living today.

ANDY SERWER: And I want to talk more about that. And indeed, Michelle, you're right. First of all, we talked a little while ago, a few months ago. And I said you were a department store. And you said, well not really. So why "not really"? What's different from you versus a traditional department store for instance?

MICHELLE GASS: It's a great question, Andy. So even in our prior chapters of the company, we've been very different than a department store. First, I would say, our locations. So 95% of our stores are off-mall. And typically you think about a department store as an anchor to a mall.

And right from the very beginning, that construct of the business was to make ourselves really convenient to our families. So easy access, in and out, hence the 95% off-mall presence. And even the store design and layout-- it's very atypical than what you might think of a department store.

So we call it the racetrack design. So you can come in our stores and you can spend as much or as little time as you want, with a really easy navigation path. And on all our registers are at the front of the store, again, speaking to that convenience. I think where we're going, Andy, is even further separation.

So I'd say one, just everything we've done and invested in from an omnichannel standpoint-- so operating our store fleets, having this important digital business, and then how we bring those things together. A lot of that over the last couple of years has been more back-of-house; so fulfilling orders from something we call ship-from-store.

So we take advantage of the inventory in our stores. And we get it to the customer faster if the pair of jeans they're looking to order is actually in their local store maybe. Versus one of our e-commerce fulfillment centers. But more and more, the thing I get excited about is how easy we're making it for customers to order online and then come in, either pick it up in the store-- we've had that service for a couple years, or now our newly introduced curbside pick-up.

And that really plays back into the convenience. We have special parking. So literally they can come in, park special to go in and get their buy-online pick-up in store, or now just drive their car right up to the curb. So that convenience factor, I think, has always distinguished us from the, call it, traditional department store.

Now we're making this move, as I said, to really redefine ourselves as much more of-- I describe a specialty concept, a specialty store-- a lifestyle retailer, candidly, serving the family for all of their active and casual needs across everything. One might think, apparel. And there's many successful players in that space. And that business is growing. That category's growing.

Yes, and we sell a lot of active and casual apparel. But there's footwear. And even meeting the needs of a healthy lifestyle is about home and healthy cooking and things like healthy sleep. And we're all looking for a little more of that these days.

ANDY SERWER: Yeah. And I want to talk a little bit more about that, and also your partnership with Amazon. But 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 7 or 8 months ago that all of this happened and 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 7 weeks. And some parts of our business closed for up to 17 weeks. That process, if I go back in time and what that was like, it's interesting, Andy. March was gonna 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.

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, 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, 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.

ANDY SERWER: And yet the problem, Michelle, for you and for so many other leaders though is that you guys weathered this storm, but now it appears like COVID is coming back. And these cases are rising in nearly every state. They're rising in your home state of Wisconsin of course.

So how are you now navigating this latest wrinkle? And what's the latest in terms of managing through this ongoing crisis I guess? It's not really over necessarily.

MICHELLE GASS: Yeah, it's certainly not over. And, Andy, I think you're looking at the same data I am. And we're gonna to be in this for a while. I think that first chapter for us was we were all facing something we had never faced before. And there was so much uncertainty on every level.

But when we did close down and made sure we had the liquidity and, like I said, did everything we needed to do for our associates-- I mean, we still had associates working. We have a big e-commerce business. And our e-fulfillment centers were very busy. And we were fulfilling orders even from the store; but I think importantly, recognizing even then that we were gonna be in this for a while, putting new processes and procedures in place for our stores to operate in this environment, but very differently.

So I'd say the good thing for Kohl's is we already have big stores. They're spacious, sort of built for social distancing from the beginning. But we set out to be best in class in operating our stores safely. So there was no stone unturned from the obvious things, like lots of sanitizer and the plexies and everything that people are doing; but investing more in labor, and putting a greeter at the front to wipe down carts; ensuring that our pin pads and our registers were wiped down after every customer interaction.

And some of the big moves, frankly, were removing merchandise from the store. And as a retailer, you never do that right? But we actually cleared out-- I mentioned that racetrack-- cleared out that racetrack of any impulse items, opened up the floor. What we're actually finding, Andy, is it's delivering a better customer experience.

So we're actually not going back. And even reducing our inventory as dramatically as we did, not knowing how long we were gonna close, and then what the rebound was gonna be like, we're seeing good results out of that; driving faster inventory turn.

But all that being said, I do feel very confident that we are operating in a different, better, safer way today. Even COVID cases are increasing. But the team's all over it.

And what's a really important data point for me is we're regularly serving our customers. And we get very high marks. They feel very comfortable shopping in our store. They feel safe.

And we're continuing to see that even with cases rising. There's still a need for people to, or a want, for people to come to Kohl's. And while in the early stage of this we were deemed nonessential, we're viewed pretty essential to a lot of our customers.

ANDY SERWER: And who do you talk to to get information and stay informed and get guidance? Do you talk to the governor? Or do you talk to Washington? Do you talk to scientists, board members? How does that work?

MICHELLE GASS: Well, all of the above-- all of the above. I think one of the great silver linings through this is how the industry has come together to be as informed as possible. So I'm part of several industry associations, as you would imagine. And these groups are holding-- in the core of the early chapters of this, we were on calls twice a week, during the week, on the weekend.

They were bringing in many experts from, to your point, the scientists to government officials-- everything in between, state level, federal level. So we would always have the latest information of what was going on. And then I think it's just been incredible with the openness across what would be traditionally competitors; that we were just completely open around best practices we were putting in place, for example, on the safety front.

Because our view is, hey, we're all gonna win together here. We want to create a safe retail environment more broadly. It's not just about Kohl's at this point.

It's how do we do our part together as an industry to have people feel comfortable being out again? Again, our consumers are living in such an uncertain environment, how can we reassure them? And we were better together on that front.

But it's an ongoing piece. Maybe, Andy, we were meeting twice a week in the early parts of this. I'm still on at least weekly calls across multiple fronts. Some are industry. Some are just big forums with CEOs from across many industries, tapping into the expertise amongst our community, but importantly bringing in the subject matter experts. That's been critical, absolutely critical to me.

ANDY SERWER: Fascinating. So you were talking to people at Target and Walmart and other big chains like that as well; and CVS or companies with [AUDIO OUT].

MICHELLE GASS: They were all on multiple calls that I was on, yes. And there were [AUDIO OUT]. I would say I great input from grocers, who were just open this whole time, and looking at the best practices that they had put in place. A lot of those applied right to Kohl's.

ANDY SERWER: Right.

MICHELLE GASS: And it felt good we were ahead of it. I mean, even before we closed our stores-- and I'll never forget that day either. We shut the door the evening of March 19. Even before that happened, we were already making the changes and ordering plexi-glasses. I myself, Andy was, believe it or not, going to local stores and seeing how those plexies were set up.

'Cause I just wanted to make sure, as made the move-- this was not a check-the-box. We really needed to keep our customers safe, and importantly, our people safe. Because that was also another factor. I mean, we employ close to 100,000 people across our distribution centers and our stores.

And we did-- by the way, Andy, make a difficult decision a few weeks into closing our stores. We had to furlough these associates. So bringing them back, we needed to make sure they were safe and they felt safe. And our return rate was very, very strong.

And on that front too, we're just such a purpose- and culture-driven company, even while these associates were furloughed-- well, we want to make sure that they would want to come back, feel welcome back. We maintained their health benefits. And all the communication I did, they continued to get that. They were still part of the team. So that safety piece and the best practice sharing and benchmarking has been instrumental, and continues to be, as we sit here today.

ANDY SERWER: Let's talk a little bit about the economy, Michelle, and specifically the need for a stimulus package-- another one. And obviously that's been all blocked up in Washington. Do you think that we need another stimulus?

And should that even included a bailout for some retailers? I mean, some people have suggested that Penney's and Macy's should get moneys directly. What's your thought on that?

MICHELLE GASS: I guess my thought overarching on this is I want the consumer to be as healthy as they can be. And there are many ways to accomplish that objective. Ideally we have people working and it's safe. But we need to make sure this virus is under control as well.

Clearly when the first stimulus package was passed, you could see it. It impacted consumers. And it gave them the safety net they needed. So I'm just a big fan of whatever we need to do to help the economy and our customers come out the other side of this.

And I'd say, for Kohl's, Andy, on this-- again, we are fortunate that we entered this period as a strong, resilient company and retailer. But then we had to make some really tough, decisive, quick actions to make sure that we maintained that position. And we did.

But there is gonna be some marketplace disruption through all of this. And we've all been seeing that. And from a Kohl's standpoint, I think ultimately there'll be an opportunity for us to capture market share. I mean, it has been painful as someone part of this industry to see what has happened. I would never wish negative things to happen to these companies or importantly the people who have had livelihoods there.

But there is a practical reality to some of this happening. And I look at it from a standpoint of the market share is gonna go somewhere. And I think we have a great concept. As I said, we're evolving who we are to be more relevant. And we have great associates to serve and welcome these customers. So we'll be there for our customers.

And to the health of the consumer, I mean, I think the good thing for Kohl's is part of our DNA is we're about great value. And whether it's how we price our goods or our loyalty program, we're in a good position to serve customers wherever they are on their financial spectrum.

ANDY SERWER: I mean, you still do have this wind in your face, Michelle, with-- people talk about the retail apocalypse. And even leaving COVID aside, of course there's just this great sea change in retailing. Of course it's all about digital.

We'll talk about your relationship with Amazon in a second. But I'm just wondering what your thoughts are in terms of the place for brick and mortar in this new reality, maybe post-COVID even. What will it take to succeed as a as a physical store?

MICHELLE GASS: Yeah, that's a great question. It's a big question. I mean, clearly COVID has dramatically accelerated digital adoption. I mean, some would say five-plus years what it typically would have taken across all demographics. And we're always gonna go where the customer is. So we're leaning into that.

I think the power of Kohl's is really about this omnichannel force like I spoke about; so how we can link the digital acceleration with our strong stores. But we're starting from a very good place, Andy. So to your point, you do see what's happening. You see brick and mortar closing.

There's been numbers thrown out there, like, 20,000 stores even this year are gonna be closed. We have close to 1,200 stores. And they're healthy. So 99% of them are cash flow positive. 90% of them are generating over a million dollars of cash. And so every time I look at this, it's like-- no, we're starting from an incredible place. We are always rigorously evaluating our stores.

But an important factor that I think isn't spoken enough about is that where we have a store, our digital sales around the store actually increase. So it's the brand relevance. I have complete confidence and conviction that even in this digital acceleration, there's gonna be a role for stores.

The day we opened our doors back, I mean, we had a line of people anxious to come in. Now, yes, they're seeing plexies. Our associates are in masks. They're coming in in masks. But they want to get out of the house. They want to engage.

They want to discover product. And discovering product online is different than discovering product in a store where you can see something, and it captures your attention or your imagination. But I do think the bar has been raised for how a brick and mortar operator performs how they operate.

And clearly there's a new safety protocol. You've got to measure up and ideally exceed the customer's expectation. That's not gonna go away, even in a year's time. And I think that's gonna have a long tail to it, perhaps permanently. And then if someone's making a decision to come to the store, you better be on your A-game; so the products you sell being even more curated on what you're offering-- both offering that dependability, but also importantly that discovery.

But customers, like I said, there's still a human need to want to get out of your house and engage. And there are different ways to do that. But shopping, that's sort of core to society. And so I'm looking forward to continuing to be one of those choices as we look forward.

ANDY SERWER: Tell us about the relationship with Amazon now. And are they a friend or a frenemy? How does that whole relationship work?

MICHELLE GASS: I would definitely put them in the friend category. When we created this relationship a few years ago and started testing, and I can describe that in a moment, it definitely got a few questions. Like, "wait a minute, aren't you competing with Amazon?" Of course, I would say, there's plenty of market share to be had. There's billions of dollars in the kinds of products we sell.

But a few years ago, we were looking at the incredible company they were building, the tailwind they had. And we have assets. They have many assets we don't have. I mean, we get the store base I keep talking about-- healthy, robust.

And another comment to our earlier discussion, the future of brick and mortar, it's not just about transacting and buying product. As I mentioned, we're using them to fulfill goods. So they're an omnichannel fulfillment center as well. And so we've really challenge ourselves to think creatively about all the ways that this physical space can be used and serve our families.

So a few years ago we connected with Amazon and talked about lots of ideas, actually, on how we could bring our complementary strengths. We've got this incredible store base and this consumer base. They have this tremendous reach and loyalty. Is there a win-win in here? And can we think differently and build on each other's strengths?

And so we started testing this idea where at the core of it we accept Amazon returns. And one of the insights we have about our customers, Andy, is that-- and we knew this from our own experience. Customers hate dealing with returns; packaging up, finding the packing slip, dealing with it.

And we have already seen that 90% of our returns happen in the store. So how could we extend that and have that really be a skill of the company that we can leverage into other spaces? And Amazon didn't have the convenience of these 1,200 stores that we offer.

So the service in a nutshell is we take Amazon returns, and we make it really easier for the customer. We have a dedicated space. It takes literally seconds to process the return. The big advantage, it's free and the customer doesn't have to package it up. So literally they can just walk in with whatever item that maybe they changed their mind on and bring it to Kohl's and they're done.

And what we get is we get new traffic and importantly building a relationship with some new customers. And what we're finding is we are getting new customers. And we're seeing a younger customer. And those are both very strategically important to us.

ANDY SERWER: And where could you take this relationship? And I mean, are you starting to track customer data with Amazon, which Amazon is so good at? And some people raise their eyebrows about that of course. But how much further could this go?

MICHELLE GASS: Yeah. They've been-- I can't say [AUDIO OUT]. They've been a great partner to us. And we compare notes on the service. We're just rounding our one-year anniversary of having taken this across the country to all of our stores.

We studied it in pilots before we went live. And it's working for them. Again, they're delivering a seamless experience to their customers. We're seeing the traffic. And there's more things we can do. A lot of those things I can't talk about right now. But we're trying out different ways to better serve the customer within this experience.

You may have heard about a pilot we're doing where-- we have this initiative, Andy, called right-sizing. Which, basically, we look at some of their stores. Our stores average about 90,000 square feet. And we have about 20 stores where we are in essence shrinking our store to go from 90,000 to say 60,000, and then bringing in a tenant next to us.

So we've done that with grocery stores. We've done it with some fitness concepts. And we are building out an Amazon-- or they're building an Amazon grocery concept that will be adjacent to a Kohl's. Will it work or not? We'll see. It has to work for both of us.

But I think it really speaks to the spirit of the partnership in trying this. And more importantly, and something that I was focused on pre-COVID, and more so even during COVID and well beyond is Kohl's being obsessive about experimentation and trying things. And we have lots of those going on right now in the speed and the agility.

I mean, I mentioned curbside. That's been done by many companies and brands, especially grocery stores, for years-- not so much in our space. We stood that up in two weeks, literally two weeks after we closed our stores.

We're trying out a new concept, it's going up this week, called the Wellness Market-- consistent with this vision of active and casual and wellness, where we're gonna be selling categories of personal care or home cleaning. We typically have not been in those categories.

We're gonna try it in 50 stores. It may or may not work. But I think it just speaks to the agility of the team to be willing to take measured risks and see what works. And there's gonna be hopefully some big things that work. And some things that don't, and we'll close them down.

ANDY SERWER: Gotta keep pushing out.

MICHELLE GASS: Absolutely.

ANDY SERWER: I want to shift gears a little bit and ask about your background. You are from Maine?

MICHELLE GASS: Indeed, I am from Maine, yes. [AUDIO OUT]

ANDY SERWER: WPI [AUDIO OUT]. Studied chemical engineering. I think, there. So how did all that being a New Englander prepare you to run this company? We'll talk about Starbucks in a second. Was that a background that helps you out right now?

MICHELLE GASS: Yeah. So it's a great question. I grew up in Maine. I went to school in Massachusetts. And I ended up at Procter & Gamble my first job out of chemical engineering. I ultimately did get my MBA at University of Washington, when we had moved to Seattle at some chapter later.

But I am a big believer in having either technical or mathematical skills as a core part of your background. And I'd say with an engineering background, that's all about problem-solving. So I learned at P&G that maybe I was less passionate about chemical problems.

But I was much more passionate about solving problems for the consumer and that level, that sense of innovation. But I think, again, the engineering mind is about looking at opportunities of problems from multiple angles and driving innovation and new thinking. And so now I get to do that in amazing ways. And I have, over now decades of my career-- just thinking about how to innovate; how to zig when others are zagging; how to surprise and look for those ways to be one step ahead of where the consumer's going.

ANDY SERWER: And you had a great run at Starbucks, help put the frappuccino on the map and worked with Howard Schultz for quite some time. What was that experience like, Michelle? And what did you learn there?

MICHELLE GASS: Boy, well, I was there close to 17 years, Andy. So hard in a quick answer to answer that. I mean, I think that experience defines who I am today. I learned so much during that period on so many levels, from incredible leaders and mentors like Howard Schultz and others there.

I think first of all, it's putting the customer and your employees at the center of everything you do. And Starbucks was phenomenal with that. And frankly, one of the reasons I came to Kohl's is I saw that as well. At the core of the Kohl's culture and value, they shared that; that passion and importance around their employees and our customers.

The spirit of innovation and entrepreneurialism, again, that has been a hallmark at Starbucks from the very beginning and continues. And they have extraordinary success. And so during all my time there, whether it was leading new beverage innovations or food or having tremendous opportunity and worked overseas in Europe, that the company really rewards, embraces disruptive thinking and innovation.

And so it's been great to further foster that here in this environment. And then, like I said, I'll just end on the culture. And it's just really important to do all those things to foster an environment so that people can come to work and be their best selves, be their authentic selves. And that's really important to me.

And I've never seen it so critical than during a crisis and during COVID where I'm responsible for 100,000 people. And when we were in the state of so much uncertainty, it was really important for me to show up as a leader; drive that clarity and that comfort.

I did weekly video outreaches to every associate so that they could kind of say, "OK, I don't know what's spinning around me. But I can look up. I can see my leader. I can see the leadership team. And they may not have all the answers. But they have my back." And I think that's critically important. And again, all these aspects-- putting the customer at the center, the role of the employee culture and that innovation, those are values I live by very much today.

ANDY SERWER: Speaking of values, I want to ask you about diversity and inclusiveness. And there's a lot of work for corporate America to do here. Only 10% of the Fortune 500 CEOs are women, point one.

And point two, workplaces in the C-suite are not nearly diverse enough. And so there's work to be done. I'm sure you agree. And I'm wondering what you're doing to make that happen at Kohl's, at the very least, Michelle.

MICHELLE GASS: Yeah, Andy, it's a really, really important point. And our work will never be done here. And myself, like many other leaders as you point out, I'm so happy and impressed with how CEOs across the country and the world are upping our game on our role in building diverse and inclusive environments for our companies and frankly even doing more than that.

So we have a very ambitious diversity strategy. And we have, over the last year, set up a task force. I personally chair that. And we're looking at diversity and inclusion from its broadest sense. So our strategy is simple. But there's lots of layers to it. Which, we're focused on the diversity and inclusion of our people, for our customers, and for the communities we serve.

As it relates to people, if I look at the overall associate base of Kohl's-- all those 100,000 people, we actually look pretty good. We look like most of America. To your point, when I look at our top leaders, our directors and above, we need to do better. And so we are doing lots of things to impact that at all levels-- from a recruiting standpoint in where we're recruiting, from our retention, from an engagement.

We have what we call business resource groups. Or some call it employee resource groups. We have nine of them that all focus on different aspects of this. So there's not one moment in any of my monthly videos or town halls that I'm not talking about the importance of diversity and holding ourselves, as leaders, accountable.

We need to make much greater progress around people of color, and even on women. I'm proud to be a female CEO. There's not enough of us. One detail too is that my CFO is a woman too. So we're a CEO/CFO female pair. And there's not that many of those either.

Our customers-- we need to be more relevant to a diverse base of customers. We have tremendous opportunity there to serve our customers more effectively. And I believe doing the right thing can also lead to great results. And as we do that, that will also enhance our results.

And then lastly community-- one of the biggest things we can do, Andy, is impact our supplier base. And so we're putting goals around how we're gonna grow our supplier base to have a much more diverse set of suppliers and make an impact there too.

ANDY SERWER: All right. Well, certainly a lot of work for you to do, Michelle. Thank you so much for your time. Michelle Gass, the CEO of Kohl's, thanks a lot.

MICHELLE GASS: Thank you, Andy. Take care.

ANDY SERWER: You've been watching "Influencers." I'm Andy Serwer. We'll see you next time.