Kohl's Partners With Aldi to Sublet Space in Downsized Stores

Kohl's said Thursday it would bring discount grocer Aldi into as many as 10 of its stores later this year in a pilot test. The department store chain aims to scale down its real estate footprint and leverage space for other brands, including Aldi. It was reported in January that Kohl's was thinking about not only downsizing its store footprint, restructuring nearly 300 of its stores, and adding grocery as well. CNBC reports Kohl's right-sizing efforts are expected to impact an additional 200 stores this year. CEO Kevin Mansell said, on a call with analysts, the moves would allow the company "to achieve further inventory reductions and margin acceleration as a result."

Total Retail's Take: Another retailer partnering with a grocery store. This past week, we report Walmart-owned Sam's Club had struck a deal with Instacart to start grocery deliveries to members. Retailers moving into the grocery delivery space has been inspored by not only popular meal-prep kits (e.g., Blue Apron), but also Amazon.com's record breaking $13 billion acquisition of Whole Foods. However, what differentiates Kohl's is that it hasn't committed the extra space in its retail stores exclusively to Aldi or groceries. CEO Kevin Mansell stated the space could be for a "variety of partners." This tactic should inspire partnerships with other brands, especially companies that are popular within certain geographic regions.