Kohl's turnaround efforts include smaller stores, more outlets

Dive Brief:

Kohl’s is adding smaller stores, Fila sportswear stores, and other concerted efforts to its turnaround plans.
Starting next year, the retailer is planning between five and 10 stores of 35,000 square-feet each, about half the usual size of a Kohl’s, in order to reach shoppers in urban and less populated areas, the company said Tuesday.
The retailer, which also plans to expand its test of outlet stores and boost its appeal to women, is a year into a three-year turnaround plan, but growth is losing steam after promising initial results.

Dive Insight:

Kohl’s seems to be having a confounding record amidst its turnaround efforts, doing many of the right things but seemingly unable to capture shoppers’ imagination in a big way. CEO Kevin Mansell told Fortune magazine that the efforts are long term — and barely started — and that there are plenty of areas in the U.S. underserved by the company.

The company says it will open 10 to 15 new Fila apparel and footwear stores in outlet malls, and that it’s also boosting its apparel for women in an effort to become a destination for them to shop for themselves and not just for their children or their home.

Finally, the retailer is also planning to expand its use of data analytics to guide its merchandising and marketing efforts.

The company is well positioned to succeed in some of these areas. It doesn’t have the emphasis on low prices that Wal-Mart has imposed on itself, for example. Its long-term exclusive relationship with the Fila sportswear brand is coming in handy with the athleisure and athletic footwear spaces doing well. But its move toward off-price stores is the most fraught with uncertainty, considering that the retailer is already something of an off-price company and that the off-price space is getting crowded.

Overall, the company may be up against the major headwinds in retail, especially in apparel, in general, says Edward Jones analyst Brian Yarbrough.

“Kohl’s is doing everything in its power, but the difficulties of selling apparel are overshadowing everything,” Yarbrough told Fortune. “It used to be a matter of problems of Kohl’s own doing, now it’s industrywide.”