Higher interest rates, stumbling earnings and a slowing economy have thrown a monkey wrench in retailer Kohl's plans to sell itself, forcing the company to piviot in a new direction.
Kohl’s (KSS) had been shopping for buyers for the department store this spring, as activist investors pushed for the move. The company drew interest from a number of potential buyers before opting to negotiate with the parent company of Vitamin Shoppe.
The frontrunner to purchase Kohl’s was Franchise Group Inc. (FRG) which initially bid $60 a share, or about $8 billion. However, the speedy rise of interest rates and deteriorating economic outlook, made completion of a deal impossible, Kohl's announced on July 1 sending the shares spinning.
With the deal off, Kohl's is back to trying to jazz up its stores and shopping experiences.
While other retailers like Target (TGT) and Walmart (WMT) grew their markets. Kohl’s didn’t work on reinventing its shopping experience as quickly.
Kohl's has looked for ways to get customers in the door, hoping they will in turn stop and shop. Kohl’s started to accept and process Amazon (AMZN) returns to bring customers through the doors. Kohls hoping the convenience of coming to your local store would be greater than that of the UPS (UPS) storefronts.
Kohl's also brought in Sephora cosmetics to entice customers to walk through their doors in 2021. It’s no secret that women primarily do the majority of shopping for the home and family, so, working with Sephora was a hopeful way to get more of those shoppers into the store.
Clothing and makeup are two items that are better purchased in person since that makes it easier to touch the fabric and test the makeup for the right colors.
Kohl’s Plans a New Shopping Experience
Faced with the continuing challenge of pulling in shoppers, Kohl's said this week it is launching a new shopping program.
The Discover @Kohl’s concept will provide shoppers with 30+ new brands, brands by women-owned businesses. The new department will adjust throughout the year, for example the July through October, Discover @ Kohl’s will feature Back to School, Get Outside, Fall Family Fun, and For Women By Women.
Kohl’s will work to incorporate programs that give back. One such project is the Gorongosa Project in Mozambique, Africa within Gorongosa Coffee Co., which works with the Gorongosa community to bring sustainable solutions to the environment. The coffee company donates 100% of their profits to this cause.
Kohl’s will introduce new brand and work to drive inclusivity within their stores. They will carry gender neutral clothing for kids, as they recognize the need for every child to feel seen and to be comfortable in their clothing choices.
For those who love Kohls and their shopping perks. Kohl’s will keep their Kohl’s Cash, Kohl's Rewards, and use of their Kohl’s Card.
