Not all of the retailer’s roughly 300 downsized stores will lease unused footage — at least in the beginning, Kohl’s Chief Executive Kevin Mansell told CNBC.
Mansell added that Kohl’s has already identified “a whole list of partners.” The company is even considering partnerships with competitors.
“If we had our preference, we are going first after well-capitalized companies, and preferably ones that have high traffic in grocery and convenience,” Mansell said.
To better manage inventories and other costs, Kohl’s decided to reduce the size of some of its large brick-and-mortar stores. The retailer posted strong holiday sales on Monday, fueled by the revamp of its beauty departments and partnerships with brands such as Under Armour and Nike.
Following the report, Kohl’s shares jumped 9 percent. Its stock hit a more than one-year high of $59.31 on Wednesday.
The news comes a year after Mansell said “stores will continue to get smaller over time.” Typically, a Kohl’s store is 100,000 square feet, but new locations were closer to 70,000 square feet as of 2017.
In-store partnerships between Kohl’s and other companies are not new. The retailer already entered into a partnership with Amazon, allowing shoppers to purchase some of the eCommerce giant’s products directly from Kohl’s locations.
The space inside Kohl’s stores designated for Amazon is called the “smart home experience.” At 1,000 square feet, the zones offer products such as the Echo, Echo Dot, Fire TV and Fire tablets. Customers can also schedule an Amazon expert to come to their home and install smart home devices from the zones.
At the time of the “smart home experience” announcement, Kohl’s also said it would promote Amazon Home Services, where customers can get assistance finding professionals for services such as lawn care and home improvement.