Kohl's to Partner With Grocers, Convenience Stores to Fill Vacant Store Space
Big-box retailer Kohl's plans to partner with grocery stores and convenience stores to lease the white space left in the roughly 300 stores it has "right-sized" over the past several years, CEO Kevin Mansell told CNBC at ICR's conference this week. The department store has created operationally smaller, more profitable stores within its roughly 87,000-square-foot boxes. The downsizing leaves room for other partnerships, including stores-within-stores for grocery and convenience store brands. "If we had our preference, we're going first after well-capitalized companies, and preferably ones that have high traffic in grocery and convenience," Mansell said.
Total Retail's Take: This is an example of a retailer trying to make the best of a tough situation. By partnering with outside companies to fill the unused space in its big-box stores, Kohl's is working the improve the all-important metric for traditional retailers, sales per square foot. The store space could bring with it the opportunity for consistent foot traffic, as Kohl's recently reported very strong holiday sales and boosted its full-year outlook. Furthermore, Kohl's has shown it's willing to take chances and be innovative — see its partnership with Amazon.com — as it recognizes traditional retailers have to evolve if they expect to survive.