Get Ready to See More Small-Format Kohl’s Stores

Kohl's
A Kohl's location in Jersey City, N.J.
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Brick-and-mortar is not dead, at least not in the opinion of Kohl’s Corp., which today announced a series of upcoming store openings.

However, as part of its ongoing omnichannel push, the department store chain is taking a leaner and smarter approach to its portfolio.

The Menomonee Falls, Wis.-based firm is set to open four new small-format doors in October. The 35,000-square-foot spaces will be located in North Smithfield, R.I.; Blue Ash, Ohio; East Windsor, N.J.; and Montebello, Calif.

Kohl’s opened eight small-format stores in 2016. Its total door count now stands at more than 1,100 in 49 states.

In addition to pursuing a smaller-format strategy, Kohl’s also has been “right-sizing” many of its big boxes with new interior layouts that utilize less square footage. The retailer estimates that by the end of 2017, nearly half of its stores will be operationally smaller.

For instance, its 89,000-square-foot location in Warner Robbins, Ga., is being reduced to 62,000 square feet of operating space.

And in 2018, Kohl’s Greenfield, Wis., store will relocate from a two-level, 85,000-square-foot mall space to a single-level, 55,000-square-foot location.

The moves are part of the firm’s long-term strategy to become a more-efficient omnichannel operator.

In a statement, chairman, president and CEO Kevin Mansell said: “Our stores remain at the core of our omnichannel strategy, and we will continue to invest in them by opening smaller formats, right-sizing and optimizing our selling space, and working to ensure that shopping in our stores is an engaging and inspiring experience for our customers.”

Already, the company is utilizing its brick-and-mortar doors to ship and fulfill Kohls.com orders, and it offers a buy-online-pick-up-in-store service.

To further support its digital growth, Kohl’s this month will begin operations at its fifth fulfillment center. The 937,000-square-foot facility in Plainfield, Ind., will be dedicated to processing, filling and shipping online orders.

While many department stores have been floundering of late, Kohl’s pulled off a better-than-expected second quarter.

For the period ended July 29, the chain’s net income gained 49 percent year-over-year to $208 million, or $1.24 per diluted share, topping analysts’ forecasts for diluted earnings per share of $1.19.

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