The recent history of department store chains suggests there are great dangers in stagnation and poorly executed retail brand makeovers. Kmart, Sears and J.C. Penney’s quickly come to mind.

In the past two years or so, Menomonee Falls-based Kohl’s Corp. has been in a corporate lull of sorts. Once a darling of Wall Street, the company earned $986 million, or $4.17 per share, in the fiscal year ended Feb. 2, down from $1.2 billion, or $4.30 per share, in fiscal 2012.

Kohl’s revenues rose 2.7 percent, to $19.3 billion, as sales at stores open at least a year inched up just 0.3 percent. However, the company’s sales growth came at the expense of profitability. Gross profit margins contracted to 33.3 percent from 36.2 percent a year earlier.

Kohl’s stock fetches just 11.6 times the fiscal 2015 earnings estimate. Back in the early 2000s, Kohl's stock was trading with a price-to-earnings (P/E) ratio above 30.

Analysts questioned Kohl’s inventory management performance. The flat performance prompted Alpha Street Research analysts recently to downgrade Kohl’s stock to "sell."

Meanwhile, the National Retail Federation recently reported that its survey projects U.S. consumers will spend 2 percent less this holiday season, with a budget of $737.95 for gifts, down from $752.24 for 2012.

However, the good news is that Kohl’s management team is showing signs that it is aware of the stagnation and is making changes to shake things up a bit.

Kohl’s announced in May that it had hired Michelle Gass, a highly regarded executive at Starbucks, to be its first chief customer officer. Gass is in charge of marketing, e-commerce and "omnichannel experiences."

Barron’s magazine recently opined that investors may be "coming back to Kohl’s."

The magazine wrote, "Skeptics could be surprised in the next year as Kohl's finally begins to live up to its retail motto, ‘Expect Great Things.’ A constellation of merely good things, including improvements in the merchandise assortment, private-label programs, and the online business, as well as cost-cutting, could result in modest revenue growth and higher pretax margins, which in turn could lift the shares (ticker: KSS) by more than 20 percent, into the mid- to high-$60s."

Gass will be integrating e-commerce, now around 7 percent of Kohl’s sales, with its brick-and-mortar stores, in part through the increased use of in-store ordering kiosks. Next year, the retailer will launch in-store delivery of online orders.

Under Gass, Kohl's is revising its marketing to stress "a broader message" of savings and value, instead of an emphasis on individual products and categories.

Kohl’s also has invested in electronic signage on its racks, enabling it to update its prices quickly.

Barron’s said the bullish case for Kohl’s began with the company buying back $4.6 billion of its shares between 2010 and 2012, shrinking its market capitalization by 30 percent. Kohl’s also initiated a shareholder dividend in 2011.

Such moves provide "a fair amount of valuation support," John Linehan, head of U.S. equity at T. Rowe Price, told Barron's.

"Spiffing up Kohl's will take time, but smart moves by management, and a sweet dividend, offer reasons to stick around. One of these days, when things click in the stores and the stockrooms, Kohl's stock will be khaki no more," Barron’s reported.