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Kohl's to pilot new store format, shuttering 18 underperforming locations

Retailer enjoyed a healthy seasonal sales boost but wasn't immune to weather that hurt other retailers in late 2015.

February 26, 2016

While the past holiday sales season was a healthy one for retailer Kohl's, the company plans to shut 18 underperforming stores this year while also debuting a new smaller store format with seven new stores nationwide.

The news, which was revealed during the company's earnings report this week, also included insight on how the venerable retail player wasn't immune to the impact of warmer than usual temps last fall and winter, which led to less than stellar sales of related clothing.

"I am particularly encouraged by the 4 percent increase we saw between Thanksgiving and Christmas. At the most competitive time in retail, customers were choosing Kohl's," said Kevin Mansell, Kohl’s chairman, president and CEO, in a statement. "This strength, however, was substantially offset by softness in early November and in January when demand for cold-weather goods was especially low, resulting in a quarterly comparable sales increase of 0.4 percent, which was below our expectations."

Kohl's intends to add two additional Off-Aisle pilot stores in Wisconsin and 12 Fila outlet stores, which will mark Kohl's first entry into the outlet space, according to the release. It will announce the store closing locations at the end of March and expects to see a savings of $45 million and annual depreciation savings of approximately $10 million. 

"We see exciting growth potential in the new stores and new formats that we are opening this year and are heavily investing in the health of our overall stores portfolio to continue to serve our current and future customers," Mansell said. "A vital component of our omnichannel approach is to clearly understand the evolving retail environment and ensure that we are well-positioned to leverage our resources on productive projects."