The list of Kohl’s closing stores includes 18 stores across the United States and the closures are to be completed by June of this year. Kohl’s is the latest retailer after Walmart, Sam’s Club, Sears, Kmart, and Target to announce the closing of some of its stores nationwide.
In regard to the list and exact locations of the closing Kohl’s stores, the Wisconsin-based retailer announced on February 25 in its Kohl’s Corporation Reports Financial Results that “the specific locations will be announced by the end of March.”
As to which ones of its 1,164 Kohl’s stores will be closing by June, Kohl’s CEO Kevin Mansell mentioned that those stores were underperforming and that their overhead cost and the vicinity to other similar stores had an impact on their selection.
“While the decision to close stores is a difficult one, we evaluated all of the elements that contribute to making a store successful, and we were thoughtful and strategic in our approach. We are committed to leveraging our resources on our more productive assets,” CEO Mansell said.
“Importantly, we also wanted to provide the best options for our associates and are proud that every affected store associate will be offered a position at a nearby Kohl’s location, or if they prefer, a competitive severance package.”
After last Thursday’s disappointing fiscal fourth-quarter report, CEO Kevin Mansell told investors in a conference call that this is the first time in the company’s 52-year history as a department store that it is closing that many stores at one time. CFO Wes McDonald added that Kohl’s has only closed about five locations since he joined the company in 2003.
“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.”
Carter Harrison, an analyst at the Conlumino retail research firm, expressed to investors that the closing of the Kohl’s stores was a strategic way to explore new ways to boost the retail store’s sales and profitability:
“As painful as it is to close stores, we applaud Kohl’s for taking action that is necessary in order to compete more effectively in a more complex and challenging retail environment.”
By closing some of its Kohl’s stores, the retail company is expecting to generate $55 million in savings. Similar to Walmart, Sears, and Kmart, Kohl’s experienced lower than expected revenues in their last fourth quarter. In addition, over the past four years, the company’s revenues stalled at around $19 billion. The closing of 18 Kohl’s stores across the United States is a shift in the company’s strategy, which includes the opening of new small-format stores this year, along with two additional Off/Aisle stores and 12 Fila outlet stores.