Shopping Centers Today International

MAR 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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feet. It also introduced a value-priced concept it calls Off/Aisle, the first of which opened last June in Cherry Hill, N.J. These will offer deep discounts on apparel, accessories and home items, the company says. Two more are set to open by early next month in the Mil- waukee area, in the cities of Wauwatosa and Waukesha. The company has plans to roll out some outlets as well. At a Women's Wear Daily summit in New York City in October, Kohl's Chair- man, President and CEO Kevin Mansell said the small stores are ideally suited for dense markets where the economics or logistics of a larger store will not work. "That is a big idea in our mind, because it allows us to reach markets that are un- derserved by Kohl's," Mansell said. Kohl's expects to start opening the outlet stores with some of its proprietary brands later this year. The company has said that its first brand partner will be Fila. Tentative plans are to open 10 to 15 stores this spring, but Kohl's has dis- closed no details on the size of the stores or when and where they will open. "I think a lot of those concepts are opportunities for them to test and gain more growth drivers, because their core concept is relatively saturated," said Chen. But it may be awhile before these initiatives are rolled out on any scale at which they can materially affect the company's sales, according to Mansell. Moving into these formats and con- cepts is smart, says Bridget Weishaar, a senior equity analyst at Morningstar, because it will be easier to make the smaller square footages profitable. "If you have more sales shifting online, you probably don't need all of that square footage," she said. "I think the smaller footprint is a really good idea for them." Kohl's will continue to face hur- dles, though, analysts argue, because its sales performance is subpar rela- tive to other department store chains. Macy's and Nordstrom are reporting annual comp-sales growth of 3 per- cent and 5 percent, respectively, while broader retail sales (excluding cars) have been growing at 2.7 percent an- nually, according to Morningstar. Still, Weishaar says, Kohl's is at least headed in the right direction. "They are abso- lutely doing all of the right things," she said. Today's retailers do have to build omni-channel capabilities, she notes, and this includes e-commerce and positioning stores to be more Internet- friendly, and Kohl's is doing that. The company reports that it now has nearly 34 million people registered for its loyalty program, plus nearly 9 million downloads for its mobile app. S C T 20 S C T / M a r c h 2 0 1 6 r e T a i l i n g T o d a y

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