Kohl's Tommy Hilfiger partnership is another blow to Macy's, malls

Dive Brief:

Adding to its growing roster of brand partnerships, Kohl's on Tuesday said it will bring Tommy Hilfiger men's sportswear to more than 600 stores, as well as an expanded assortment online in the fall.
The discount department store will install "an elevated branded in-store and merchandise experience in nearly 100" of those stores, according to a company press release.
The announcement is the latest in a series of new tie-ups at Kohl's in recent months, including with Cole Haan, Eddie Bauer, Lands' End and Sephora.

Dive Insight:

Kohl's may not be totally immune from the woes befalling most department stores, but its location strategy largely away from the mall and its discount orientation give it certain advantages. Those factors help keep traffic flowing, and in recent years that has been spiked further by its agreement to take Amazon returns, although it's not clear that is leading to many added sales.

Still, the channel is a bit risky for a label like Tommy Hilfiger that is trying to burnish its brand, according to Jane Hali & Associates analyst Jessica Ramírez.

"It's good for Kohl's, which has really been trying to clean out their assortment and bring in brands that are a little bit more attractive," she said by phone. "For Tommy, it could be sort of a test to see how it goes because it is only men's sportswear. I'm a bit cautious about it because obviously, they're also just trying to move into places that are healthier again, and department stores are mostly what people are pulling away from. The advantage that Kohl's has is that off mall has been doing very well compared to anything in the mall."

The work being done at Kohl's to elevate its merchandising is more striking that what can be seen at Macy's or J.C. Penney, Ramírez also said. In fact, the Tommy-Kohl's announcement may only accelerate the declines at mall-bound department stores. In emailed comments Tuesday, Credit Suisse analyst Michael Binetti deemed the partnership positive for both Kohl's and Tommy Hilfiger-owner PVH but a "new concern for Macy's."

"Ongoing new brand launches continue to boost the relevance of [Kohl's] stores post-COVID," Binetti said. "But pace of brands moving off-mall is becoming a major concern for competitiveness of mall bellwethers like Macy's."