Kohl's rethinks its store concept to be 'operationally smaller'

(USA TODAY) -- Unlike many retailers in recent years, Kohl's Corp. has managed to avoid mass closures of its stores. However, the Kohl's stores of tomorrow will be smaller than the typical 80,000-square-foot location of today.

Kohl's is planning to rework store layouts to make the sales floors "operationally smaller" at half of its retail locations, according to a news release from the company Tuesday.

"By optimizing and rightsizing stores based on customer and inventory needs, Kohl’s stores are able to operate more efficiently and provide a more engaging customer experience," Kohl's said in the statement.

The Menomonee Falls-based company is reducing the number of fixtures on the sales floor and the amount of inventory on display.

The strategy is part of an ongoing inventory reduction and management initiatives as Kohl's determines needs at stores across the country. Through examining sales patterns, Kohl's says it is able to better target merchandise.

Shoppers in Wisconsin may need a heavy blanket through the winter, but at the same time someone in Florida may still want sandals on the shelves.

The smaller store format is already in place at about 300 stores. Some of the newer stores were just built smaller, while some others have been "right sized" with reduced square footage. The adjustments were made after assessing the inventory that was best kept on the shelves at each store.

The company said the idea is to have a smaller store without customers missing out on purchases.

The plan is to make half of the more than 1,100 Kohl's stores "operationally smaller" in this way. Going forward, many stores will become smaller through right sizing, said Jen Johnson, vice president of communication.

That process will take several years, Johnson said.

The revamped stores will mimic the chain's small format stores, about 35,000 square feet. Kohl's opened eight small format stores in 2016 and will open four more in October. Plans to add smaller stores were first announced in 2015.

The company said the style of store is "flexible" and "efficient" in the release.

Kohl's does have established plans to reduce store size at a few locations across the country.

The move to continue investing in retail locations sets Kohl's apart from many other retailers. Competitors Macy's and J.C. Penney have both shuttered stores. J.C. Penney is closing more than 100 stores this year.

Like many retailers, Kohl's sales fell in the second quarter, earning $208 million in the three months that ended July 29. At that time, CEO Kevin Mansell said its brick-and-mortar stores are increasingly vital in fulfilling online orders.

The company is stepping up its ability to fulfill online orders by opening its fifth distribution center. The 937,000-square-foot e-commerce fulfillment center in Indiana will start shipping orders this month. The other four fulfillment centers are in California, Maryland, Ohio and Texas. All retail stores also fulfill and ship orders made online.

USA TODAY contributed to this report. 

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