Dive Brief:
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Kohl’s on Thursday announced it will close 27 underperforming stores by April.
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The department store will also close its San Bernardino, California, e-commerce fulfillment center, in operation since 2010, when the lease expires in May.
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The affected employees have been informed and offered a severance package or an opportunity to apply to open roles at Kohl’s, according to a company press release.
Dive Insight:
This may be the tip of the iceberg when it comes to downsizing at Kohl’s.
Evercore ISI analysts led by Michael Binetti in November noted that more than 300 Kohl’s locations have been “consistently passed up for reinvestment” but that the retailer hadn’t yet made any move to shutter any. In fact, the company in 2023 said it would not only avoid closures, but expand its footprint.
“We think Kohl’s may have to look at its first largescale store closure program in 2025,” Binetti said then.
The department store has struggled to gain traction in its turnaround. At the end of last year, CEO Tom Kingsbury acknowledged that many of the company’s recent maneuvers had failed and that it would walk some of them back.
Speaking to analysts during an earnings call, neither he nor Chief Financial Officer Jill Timm directly addressed questions about the possibility of closing stores. Timm did say that Kohl’s is always evaluating its fleet and that most of it is profitable, but that it would take opportunities to address underperformers.
Michaels CEO Ashley Buchanan is replacing Kingsbury as CEO this month.
