As retailers face tariff and wage pressures, Kohl's CEO says priority is to ensure pricing is appropriate

  • Retailers are facing pressures like wage increases and tariff impacts, but Kohl's CEO Michelle Gass says the company is working to make sure the customer is happy.
  • "It really does start with that customer and ensuring that we're priced appropriately and competitively," she says.
  • Gass says the holiday season is where Kohl's excels, especially because it is known for Black Friday and Cyber Monday sales.

Retailers are facing pressures like wage increases and tariff impacts, but Kohl's CEO Michelle Gass told CNBC on Tuesday that the company is working to make sure the customer is happy.

"It really does start with that customer and ensuring that we're priced appropriately and competitively," Gass said in an interview with Courtney Reagan.

To that end, the retailer is focused on two key priorities: driving sales and traffic, as well as operational excellence.

"We have our teams all focused on ways to work differently so we can extract costs that are less productive and reinvest them in the business. So that might be some of the long-term bets we have like technology or also mitigating shorter-term issues, like wages increasing."

Kohl's was among the coalition of retailers that sent letters to U.S. Trade Representative Robert Lighthizer opposing the U.S. tariffs on Chinese goods.

The two nations have been engaged in a tit-for-tat tariff battle and retailers have warned that the escalating trade war would undermine the U.S. economy and raise prices.

Holiday season

Gass said the holiday season is where Kohl's excels, especially because it is known for Black Friday and Cyber Monday sales. She said that its activewear does exceptionally well, and a new partnership with toy store FAO Schwarz will propel the company in the following months.

In October, FAO Schwarz announced that it will sell its toys at Kohl's for the first time.

"We have a great lineup of proprietary brands and there are new categories for us like toys," Gass said on "Power Lunch." "We just introduced the LEGO brand and FAO Schwarz so as those opportunities present themselves we're excited to capture even more market share."

Kohl's partnership with Amazon, that allows customers to return products to the store and Kohl's to sell some Amazon products, also is propelling Kohl's forward, she said. The 1-year-old program is currently in 100 stores across three markets.

"We're really good at testing and we want to make sure if we're going to do something for the long run that we really understand it," Gass said. "We're really studying to see if we can create a great customer experience so it takes time to ensure that we can deliver on that experience and ultimately the partnership needs to work for both of us."