Store Optimization

03/02/2018

Stores remain at the core of Kohl’s omnichannel strategy. The company will continue to invest in our store base by optimizing our existing store footprint, opening smaller format stores and rightsizing additional stores. Kohl’s is focused on amplifying the role and relevancy of our stores while also working to ensure that shopping in a Kohl’s store is an engaging and inspiring experience for our customers.

Standard to Small
Kohl’s currently has 300 standard to small stores. While the footprint remains the same, these stores have been optimized with new interior layouts – becoming operationally smaller through balancing inventory and adjusting fixtures in an effort to enhance store profitability and improve customer experience. Kohl’s standard to small strategy has been a key driver of Kohl’s overall reduction in inventory. Based on the success of the program, Kohl’s will be rolling out the strategy to an additional 200 stores in 2018. The standard to small strategy success has enabled the company to recognize an opportunity to separately rightsize many of these stores as a next step.

Rightsizing
By rightsizing stores based on customer and inventory needs, Kohl’s stores are able to operate more efficiently and provide a more engaging customer experience. Rightsizing, in the simplest terms, means shrinking the footprint of select Kohl’s stores to be smaller. The remaining, underutilized square footage is then either leased or sold by Kohl’s to a different entity.​

After rightsizing two stores in fall 2017, Kohl’s is accelerating this strategy in 2018. Kohl’s will rightsize approximately 12 additional stores, including a five to 10 store pilot effort with the fast growing supermarket chain Aldi. Kohl’s will also continue to seek out strong partners during this pilot phase for existing rightsized locations that are well-capitalized companies and will drive traffic to our stores.​

Small Format, 35,000 Square-Foot Stores
Kohl’s currently operates twelve 35,000 square-foot stores, which have all been opened in the last two years in both small and large markets. The smallest of Kohl’s store formats, the 35,000 square-foot stores have 60 percent less space and 60 percent less inventory than a standard Kohl’s store. These stores are flexible and efficient, with fixtures that can be adapted by department and for localized merchandise and assortments. Like the rest of Kohl’s store fleet, these stores further serve as pick up locations for customers who opt to buy online and pick up in store. Small format stores also provide a blueprint for Kohl’s to maximize its store presence in small and large markets and to continue to identify operational improvements that can be transferred to larger footprint stores.