Kohl's to partner with Aldi
Kohl's first partnered with Under Armour, then Amazon and is now turning to discount grocer Aldi in its latest move to get shoppers in its stores.
The brick-and-mortar chain reported that it is teaming up with Batavia-based Aldi to test groceries at up to 10 of its department stores.
The new partnership comes at a time with the Menomonee Falls, Wisconsin, retailer is reducing the size of some of its stores. Kohl's said it plans to sublease space freed up by its store reductions to Aldi.
"We will rightsize approximately 12 stores including a 5-10 store pilot effort with the fast-growing supermarket chain Aldi," Kohl's CEO Kevin Mansell said Friday while discussing the company's earnings. When Kohl's says rightsize, it means making an existing physical Kohl's store slightly smaller, thus making space for another retailer like Aldi.
The company did not say where the new concept will be tested, but said the Aldi entrance will be separate from the Kohl's front doors, and shoppers will go outside to get from one store to the other.
Aldi, known for low prices on its private-label items, plans to spend $3.4 billion over the next five years to open 900 supermarkets, the company has said. Aldi, a German discount grocer with U.S. operations based in Batavia, made the announcement earlier this year when its European rival, Lidl, starts opening its stores in the U.S. with plans for as many as 100 by this summer.
Retail analysts say Kohl's innovative moves are positive at a time when many retailers are struggling to survive. Sales at Kohl's stores open at least a year rose 6.3 percent during the most recent quarter, the company said, while profits increased 38 percent.
About a year ago, Kohl's, which already sold Nike and Adidas product lines, added Under Armour to its mix, a move that helped sales. "The launch of Under Armour exceeded our expectations, and the launch accelerated our rate of growth in the important active category," Mansell has said.
Then, last fall, Kohl's started accepting Amazon returns at 82 Kohl's stores in the Chicago and Los Angeles markets. In 10 of those stores, Amazon opened "smart home" shops.
In addition to offering the free returns, these stores debuted the first Amazon smart home boutiques within Kohl's stores. The shops are staffed by Amazon employees, carve out 1,000 square feet of space in Kohl's stores and are designated for Amazon products including the Amazon Echo, Echo Dot, Amazon Fire TV, Fire tablets and more.
Stores in the area that were part of the launch are in Elmhurst, Tinley Park, Chicago Ridge, Norridge, on North Elston Avenue in Chicago and in Highland, Indiana.