Kohl’s To Close 18 Underperforming Stores; Will Test Smaller Format Shops

With Kohl’s stock value still around 40% off of where it was not even a year ago, the retailer has announced plans to shed a few locations from its roster while simultaneously adding a handful of smaller-format stores.

In announcing its quarterly earnings this morning, Kohl’s revealed its intention to shutter “18 underperforming stores” at some point in 2016. The retailer, whose discounts have been accused of being literally unbelievable, won’t yet say which stores are on the chopping block, but plans to announce that information “by the end of March.”

According to Kohl’s, the 18 closures only represent about 1% of sales for the Wisconsin-based retailer.

“While the decision to close stores is a difficult one, we evaluated all of the elements that contribute to making a store successful, and we were thoughtful and strategic in our approach. We are committed to leveraging our resources on our more productive assets,” CEO Kevin Mansell said in a statement. “Importantly, we also wanted to provide the best options for our associates and are proud that every affected store associate will be offered a position at a nearby Kohl’s location, or if they prefer, a competitive severance package.”

In addition to the store closings, Kohl’s also announced an upcoming test of smaller-format stores, with seven of these cozier locations set to open around the country in the coming year.

Last year, Kohl’s dabbled its toes into the outlet business with a single store, dubbed Off/Aisle by Kohl’s, in New Jersey. Today, the company said it plans to open two more Off/Aisle stores in Wisconsin.

“We see exciting growth potential in the new stores and new formats that we are opening this year,” said Mansell.

While Kohl’s sales have improved slightly in recent quarters, the company’s low stock price could still makes it a prime takeover target for a bigger retailer. Earlier this year, it was reported that the company was considering the idea of going private to avoid ending up as part of some other company’s portfolio.