Kohl’s Aims for Efficiency With Smaller Stores

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Kohl's

Kohl’s is shrinking.

The department store chain plans to slash floor space in about half of its 1,100 stores by the end of the year. Additionally, the new stores slated to launch in October will all be small format.

Kohl’s has already begun the process of “rightsizing and optimizing” store selling space in 300 locations. The new interiors have been made “operationally smaller” through adjusting store fixtures and creating a more balanced inventory.

The retailer is also adjusting the physical sizes of select locations and relocating others, cutting stores from more than 80,000 square feet to between 55,000 to 62,000 square feet.

The downsized stores are expected to improve efficiency, boost profitability and create a more engaging environment for shoppers.

[Read more about Kohl’s latest financials: Kohl’s Trends up in the Second Quarter]

Going forward, the retailer is focused on small-format stores. This fall, four 35,000-square-foot locations will open, joining the eight already in operation. The smaller stores feature flexible fixtures that can be used in different departments. Shoppers looking for a wider selection are able to browse the company’s site via in-store kiosks and place orders for home delivery.

Kohl’s chairman, CEO and president Kevin Mansell has said its important for Kohl’s to focus on convenience when it assesses the value of its brick and mortar fleet, since many shoppers still prefer to shop in store and others rely on stores to fulfill their online orders. With stores that are 15 miles from 85 percent of Americans, Kohl’s is trying to use its proximity to customers as a benefit.

In addition to the store changes, the company is opening its fifth fulfillment center this month in Plainfield, Indiana. The new 937,000-square-foot facility will be used to process and ship online orders.

Despite a slight drop in sales for the second quarter, Kohl’s reported an uptick in foot traffic, showing the company’s focus on getting shoppers back into stores is gaining traction.

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