Kohl’s to reduce floor space in half of its stores by end of year
There are some major changes going on at Kohl's stores.
The department store retailer announced plans to make nearly half its locations "operationally smaller through balancing inventory and adjusting fixtures" by the end of 2017. To date, the new interior layouts have been rolled outin 300 of Kohl's 1,100 locations.
In addition, Kohl’s plans to "right-size" the physical square footage of its store in Warner Robbins, Ga., reducing it from an 89,000-sq.-ft. store to a 62,000-sq.-ft. one. The chain's store in Fort Smith, Ark., will be reduced from 87,000 sq. ft. to 62,000 sq. ft.
Kohl’s is also upping its commitment to small format stores, In October, the chain will open small-format stores, averaging 35,000 sq. ft. each, in North Smithfield, Rhode Island; Blue Ash, Ohio; East Windsor, N.J.; and Montebello, Calif.
In spring 2018, Kohl’s will open a single-level 55,000-sq.-ft. store in Greenfield, Wis., which will be a relocation from its current two-level 85,000 sq. ft. store in nearby Southridge Mall. Earlier this year, Kohl’s relocated its 80,000-sq.-ft. Charlotte, N.C., store to a nearby 55,000 sq.-ft. location.
“Our stores remain at the core of our omnichannel strategy and we will continue to invest in them by opening smaller formats, rightsizing and optimizing our selling space and working to ensure that shopping in our stores is an engaging and inspiring experience for our customers,” said Kevin Mansell, Kohl’s chairman, CEO and president.
Kohl’s also announced it will begin shipping from its fifth e-commerce fulfillment center in Plainfield, Ind., this month. The 937,000-sq.-ft. facility is equipped with state-of-the-art technology to maximize productivity and throughput.
“We have set a goal to be the best-in-class omnichannel retailer and opening our fifth e-commerce distribution center will support the delivery of online orders faster and more efficiently to customers nationwide," said Mansell.
When you start downsizing this amount of stores on a size of this amount it means one thing. You are losing a massive amount of money. You are going to lay off thousands. The leases are killing you. The next recession breaking point that will kill the country will be the retail collapse
Old Navy joins historic makeover in Michigan
Presidential candidate John F. Kennedy delivered a stump speech there not long after it opened in 1960. Legions of thriving General Motors employees kept it thriving for decades. But Tech Plaza in Warren, Michigan, suffered a crushing blow when Walmart left in 2008, and the center was nearly vacant when Detroit-based Petzold Enterprises acquired it in 2014.
Tom Petzold’s lured back Walmart that same year, and his company has since rebuilt Tech Plaza into a going concern, adding Marshals, DWS, Carters/OshKosh, Five Below, and Ulta in ensuing years. This week, Old Navy signed multi-year lease at the center.
“We sought to make the center as upscale and modern as possible,” said Petzold, the company’s president. “Old Navy is the ideal complement to our other marquee stores that will truly help reestablish the Tech Plaza as a viable shopping destination.”
To assist in the makeover, Petzold assembled a project team made up f local companies: Tiseo Architects from Livonia, design firm R. Berlin and Associates from Northville, and NCS Construction Services of Bloomfield Hills. The team delivered 118,000 sq. ft. of retail space to the market over the past 12 months, and has leased 73,600 sq. ft. to 11 stores, many unique to the city of Warren.
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Macy’s consolidates merchandising ops, cuts 100 jobs
Macy's is streamlining its merchandising operations, expanding its exclusive products and putting increased emphasis on customer insights and data analytics as new CEO Jeff Gennette begins to make his mark on the ailing department store giant.
In a move that will result in a loss of about 100 jobs, Macy's is consolidating three functions – merchandising, planning and private brands – into a single merchandising department organized around five ‘families-of-business’ (ready-to-wear, center core, beauty, men’s and kid’s, and home). It will be led by 35-year Macy's veteran Jeff Kantor, who currently serves as chief stores and human resources officer. Kantor will report to Hal Lawton, the newly announced president of Macy's and a former senior executive of eBay.
The new merchandising structure will be supplemented by strengthened customer insights and data analytics, which the company is expanding to include inventory replenishment and pricing capabilities.
"The changes we are making today maintain our core merchandising skills while massively simplifying our structure and processes for greater speed and flexibility," said Macy's CEO Jeff Gennette. "We are also further strengthening our consumer insights and data analytics capabilities so we can make better decisions faster, balancing the art and science of retail.”
Gennette added that Macy's plans to grow its exclusive merchandise offering to 40% of its business. He called exclusivity a "great customer loyalty tool."
"Having a single lens for each family-of-business will allow us to expedite our strategy of delivering this edited, elevated and exclusive assortment to our best customers," Gennette stated. "To achieve this, we will aggressively grow our private brands while also offering the best national brands."
Macy's estimates it will save approximately $30 million on an annual basis related to the restructuring, some of which may be used for reinvestment in the business. It anticipates one-time costs of approximately $20 million to $25 million associated with this restructuring, to be booked primarily in the third quarter of 2017.
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