Larry Montgomery (1948-2019) is best known as the CEO and Chair who drove the expansion of Kohl’s from a Midwestern chain into a $16-billion nationwide retailer with 1,000 stores. To drive such massive coast-to-coast growth, he led the rapid and steady build-out of Kohl's brick-and-mortar footprint, averaging 100 new stores per year during his tenure as CEO from 1999 to 2008. He also served as Vice Chair, Board of Directors (1996-2000) and Chair of the Board from 2003 until his retirement in 2010.
- Larry Montgomery is known as the CEO and Chair who led the expansion of Kohl’s from a Midwestern chain into a $16-billion nationwide retailer with 1,000 stores.
- Montgomery led the rapid and steady build-out of Kohl's brick-and-mortar footprint, averaging 100 new stores per year from 1999 to 2008, when he stepped down as CEO.
- As a hands-on CEO and Chair, Montgomery understood the infrastructure needed to manage the large-scale expansion of a store like Kohl’s, including all the logistics of supply chain and distribution centers.
Education and Early Career
Born in Grand Rapids in 1948, Montgomery said his ambition as a young man was getting out of Michigan. After earning B.S. in Mathematics at Ferris State University in Michigan, he achieved that goal by launching a retailing career that ultimately spanned the U.S.
Before joining Kohl’s in 1988, Montgomery spent 16 years (1972-1988) in executive positions at other retailers in Michigan, Minnesota, and Indiana. During his first decade at Kohl’s, Montgomery served as Senior Vice President, Director of Stores (1988-1993) and Executive Vice President, Director of Stores (1993-1996).
Founded in 1962, Kohl’s is a Wisconsin-based retail chain with a brick-and-mortar presence throughout the U.S. and a robust online presence. The stores specialize in apparel and accessories (80% of sales) as well as home products and linens (20% of sales). Kohl's was taken private in 1986 by a management-led group of investors and reorganized as Kohl's Corporation in 1988.
In 1992, four years after Larry Montgomery joined, he was on the executive team that took Kohl’s public in an initial public offering (IPO) of 11.1 million shares.
By 2021, ten years after his retirement, the growth trajectory Montgomery designed had made Kohl’s the largest U.S. department store chain and one of the largest retailers of an impressive array of designer brands.
First Decade at Kohl’s: Taking Market Share from Competitors (1988-1998)
From the time Montgomery joined Kohl’s under then-CEO Bill Kellogg in 1988, he was on the executive team that launched one of the most aggressive expansions in retail history. During his 5-year tenure in his initial role as Senior Vice President and Director of Stores (1988-1993), he drove massive sales growth: from $388 million in 1988 to $1 billion in 1992. After supporting Kohl’s IPO and emergence as a public company in 1992, he was promoted to Executive Vice President and Director of Stores in 1993 and Vice Chair of the Board of Directors in 1996.
In 1998, during Montgomery’s tenure as Vice Chair, Fortune called Kohl’s “the best retailer you've never heard of,” citing the fact that heavyweight competitors like Sears and J.C. Penney were sitting up and taking notice of the high-growth trajectory of their Midwestern rival. Not only had Montgomery and his team exceeded a target of 20%-per-year sales growth announced in 1992, but “consistent double-digit same-store sales growth” was evidence that Kohl’s wasn’t increasing revenue solely by adding stores—they were taking market share from competitors by increasing store sales in mature markets. For example, from 1997 to 1998, Montgomery and his team increased comparable-store sales by 10%—significantly better than Wal-Mart at 6.1% over the same time frame.
Second Decade at Kohl’s: Coast-to-Coast Retail Expansion (1998-2008)
In the 7-year time frame from the IPO in 1992 to 1999 (one year after Montgomery was named CEO), he and his team had quadrupled revenues from $1.1 billion (1992) to $4.56 billion (1999). Over the next decade, Montgomery grew the Kohl’s chain from 213 stores in 22 states (with annual sales of $4 billion) in 1999 to 1,000 stores in 48 states (with annual sales of $16 billion) in 2009.
Strategic Vision Across the Enterprise: From Infrastructure to Fashion
Much of Kohl’s spectacular success through the 2000s has been credited not only to Montgomery’s strategic vision but also to the highly disciplined and effective operating strategies that he developed and implemented across the enterprise.
As a hands-on CEO and Chair, Montgomery understood all the nuts and bolts of the infrastructure needed to manage the large-scale expansion of a store like Kohl’s, including all the logistics of supply chain and distribution centers. On the merchandising side of the business, he also understood that central to the success of his coast-to-coast build-out was attracting a broader customer base outside of the Midwest—and that called for a major fashion upgrade to trendier national brands. To make that happen, he had his team negotiate deals with national designer brands previously found only in department stores–some of whom were at first reluctant to consider working with a discounter.
100 New Stores Per Year: Impossible-to-Repeat Performance
During his 10-year tenure as CEO of Kohl’s, Montgomery led the rapid and steady build-out of Kohl's brick-and-mortar footprint, averaging 100 new stores per year from 1999 to 2008, when he turned leadership over to his successor, Kevin Mansell. In the retail industry, the unprecedented scope and scale of the growth he led was credited to “a certain operating vision and discipline that Larry brought to the party… not everybody could have brought that expansion off as successfully and as smoothly as he did.”
Montgomery’s Unique Model for Hybrid Department-Discount Stores
In defiance of conventional wisdom in the retail industry, which says stores must brand either as department stores or as discounters (never both), Montgomery maintained Kohl’s unique status as a hybrid store by focusing his senior team on Kohl’s target customer: middle-income families who want both value and style in a convenient, clean, easy-to-navigate store with fully stocked shelves and ample parking. To provide a high-end, low-cost shopping experience for Kohl’s customers, he prioritized a multi-pronged strategy to drive sales in the unique model he designed: the hybrid department-discount store:
Price, Availability, Major Market Efficiencies: Montgomery was one of the first CEOs in the industry to reap the cost benefits of concentrating stores in major markets to drive supervision, logistics, and distribution efficiencies—he even used helicopters to study traffic patterns and scout out the best locations. To ensure Kohl's could price merchandise lower than department stores, Montgomery’s team was also disciplined about controlling internal costs, from self-service shoes to centralized checkout. To ensure that products were always available for shoppers, he was rigorous about staff maintaining in-stock positions on all merchandise.
Top National Brands: Unlike house-brand discounters like Target and private-label stores like J.C. Penney, Montgomery and his team negotiated merchandising relationships with top national brands previously found only in discount stores: Levi's, Nike, Lee, Reebok, Krups, Champion, Dockers, Jockey, etc.
Convenience, Cleanliness, Lighting: By locating stores in stand-alone locations instead of shopping malls, Montgomery made sure that Kohl’s customers had easy in-and-out access to stores. He was also vigilant about well-lit parking lots and store cleanliness, inside and out.
Racetrack Design: Rather than follow the conventional retail strategy of trying to keep shoppers in the store as long as possible, Montgomery believed that Kohl’s customers would spend more money if they could shop more quickly—and it would be a far less frustrating shopping experience. By designing a store layout modeled on a racetrack, he ensured that customers could easily walk past all store merchandise, instead of trying to hunt for products in a disorganized store layout.
Media Advertising and Grand Openings: Whenever Kohl’s entered new markets, Montgomery launched carefully coordinated media advertising blitzes—about everything from discounts, parking, and brands to strollers—in advance of grand openings with full fanfare.
What Is Larry Montgomery Best Known for?
Larry Montgomery is best known as the CEO and Chair who drove the meteoric expansion of Kohl’s from a Midwestern chain into a $16-billion nationwide retailer with 1,000 stores.
How Fast Did Larry Montgomery Expand Kohl’s?
During Montgomery’s 10-year tenure as CEO, the rapid build-out of Kohl's brick-and-mortar footprint averaged 100 new stores per year—from 213 stores in 22 states (with annual sales of $3.7 billion) in 1999 to 1,000 stores in 48 states (with annual sales of $16.4 billion) in 2008.
What Were Larry Montgomery’s Charitable Causes?
Larry Montgomery was an early supporter of the expansion of Mayo Medical School to Arizona, including the addition of a new Master's Program in the Science of Health Care Delivery. He also served on the Mayo Clinic's Arizona Leadership Council, an advisory and philanthropic group.
The Bottom Line
Much of Kohl’s success has been credited not only to Larry Montgomery’s strategic vision but also to the highly disciplined and effective operating strategies that he developed and implemented across the enterprise. His growth strategy delivered unmatched results in the notoriously tough retail space.
When Montgomery took the helm as CEO in 1999, the Kohl’s chain had 213 stores in 22 states, with annual sales of $3.7 billion. When he stepped down as Chair in 2009, Kohl’s had almost 1,000 stores in 48 states, with annual sales of $16.4 billion.
In defiance of conventional wisdom in the retail industry, which says stores must brand either as department stores or as discounters, Montgomery maintained Kohl’s unique status as a hybrid department-discount store.