Kohl’s Expands Sephora Partnership to All Stores

Kohl’s is expanding its Sephora shop-in-shops to all of its more than 1,100 locations.

The department store retailer, which currently operates Sephora shops in 600 doors, said its stores with Sephora locations benefit from higher sales compared to stores without the shop-in-shops. Kohl’s projects that the expanded partnership will ultimately reach $2 billion in annual sales by 2025.

“We are incredibly proud of how our companies have come together so seamlessly to create a truly unprecedented and unique in-store experience,” said Kohl’s CEO Michelle Gass in a statement. “We couldn’t be happier with how our partnership with Sephora continues to perform and achieve the goals we set out to accomplish. Our success to date proves that this partnership is working, and this expansion is the next, exciting chapter in our history together.”

According to Kohl’s, about half of shoppers who buy items at Sephora also buy something from Kohl’s, and customers who visit the shop-in-shop return to Kohl’s more frequently than average customers.

Kohl’s and Sephora launched the long-term partnership in August 2021, which included a plan to open 850 Sephora shop-in-shops in Kohl’s stores by 2023. In February, the retailer said it would open 400 Sephora shops in 36 states in 2022 to bring its total number of shops to 600.

Since launching the partnership, Kohl’s said it has acquired more than 1 million new customers.

Sephora Americas president and CEO Jean-André Rougeot noted the “potential” that this expansion brings.

“At Sephora, our mission continues to be welcoming more people into the prestige beauty community, and we are achieving exactly that,” Rougeot said. “In the past 12 months, we’ve been able to bring the premium experience Sephora is known and loved for to new communities across the country, giving them the access to beauty that we know they are yearning for.”

Kohl’s on Thursday also cut its outlook for the year after reporting a hit to its business in Q2 from macroeconomic headwinds. The Menomonee Falls, Wis.-based retailer reported net income of $143 million, or $1.11 per share, ahead of analysts’ expectations of $1.03. Revenue was down 8.5% to $4.09 billion, compared to the $3.85 billion expected.

Kohl’s CEO Michelle Gass said inflation and weaker consumer spending, especially among middle-income customers, impacted the company’s results in the quarter. Gass noted that consumers are making fewer shopping trips and spending less overall, especially in discretionary categories. This slowdown, Gass said, has disproportionately impacted Kohl’s, where apparel is a key category for the department store retailer.

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