Why? It boils down, in large part, to real estate.
“We have always talked about our off-mall [stores] being a strategic asset for the company,” Chief Executive Michelle Gass told CNBC in a phone interview Thursday morning. “I think it will be even more so as we look to what the new normal is. … I do think our real estate portfolio will be an asset.”
Kohl’s operates more than 1,100 locations — many of which are situated within open-air shopping centers, alongside nail salons, grocery stores and local eateries. Analysts are predicting consumers will be wary of returning to enclosed shopping malls in a post-Covid-19 world, but will be more likely instead to venture to shops that are easily accessible by car, such as Kohl’s.
It is evident mall-based retail is struggling. Luxury department store chain Neiman Marcus filed for Chapter 11 bankruptcy protection Thursday morning, following a filing by apparel brand J.Crew earlier in the week. Department store operator Lord & Taylor is looking to liquidate its stores as soon as they are reopened, a Reuters report said. And Texas-based chain J.C. Penney has also been exploring filing for bankruptcy, with its stores temporarily forced shut to help halt the spread of the coronavirus.
Kohl’s announced Thursday morning it will reopen stores in 10 additional states including Texas and Alaska come Monday. The retailer already reopened in four states — Arkansas, South Carolina, Utah and Oklahoma — earlier this week. That means about 25% of Kohl’s stores will be open by next week, if everything goes as planned, according to Gass.
Operating hours until further notice will be reduced to 11 a.m. to 7 p.m., the company said, and there will be dedicated shopping hours in place for at-risk individuals, including pregnant customers, each Monday, Wednesday and Friday, from 11 a.m. to noon. Kohl’s said it will be shutting all fitting rooms until further notice.
“We have done a lot of benchmarking,” Gass said about Kohl’s plans. “A lot of these things are becoming best industry practices.”
“There will be great attention to detail,” Gass said about Kohl’s accepting any returns. She said returned items will be set aside for at least 48 hours.
Kohl’s will also continue to offer curbside pickup for online orders — a service it has had in place since April. Gass said the company was able to pull together plans in under two weeks to make that happen. A customer recently ordered an engagement ring from Kohl’s website for curbside pickup, she said.
Kohl’s joins a growing list of retailers including Macy’s, Nordstrom and Gap that are putting plans in place to get stores back up and running after many were temporarily shut in mid-March. It remains to be seen if shoppers are ready to get back, however.
Kohl’s shares were up more than 4% Thursday morning. The stock, which is valued at about $2.7 billion, has fallen more than 67% this year.
Posted by CNBC