Kohl’s is banking on a new demographic: babies. The department store chain announced today (Mar. 12) that it’s bringing Babies “R” Us products to 200 Kohl’s stores by August in a new partnership struck with the baby brand.
Kohl’s said it is expanding its assortment of baby items to include products meant for activity, bathing, furniture, feeding, and safety.
Wisconsin-based Kohl’s has launched the partnership with New York-based firm WHP Global, the owner of Babies “R” Us. The firm also owns kid-friendly brand Toys “R” Us. The Babies “R” Us shops will be located inside of select Kohl’s department stores and will range between 750 sq. ft to 2,500 sq. ft, the company said.
The omni-channel retailer said customers will be able to shop for the baby-focused products in one its designated baby shops and online via its Babies “R” Us registry, which will live on its Kohls.com website.
Tom Kingsbury, Kohl’s chief executive officer, said the company’s broader growth strategy is focused on “bringing more relevant products to the millions of customers we serve.”
During the company’s quarterly earnings call, Kohl’s Kingsbury said Babies “R” Us shops are a “collective white space” for the company that could be worth “a $2 billion dollar opportunity over the next few years.”
The climb of Kohl’s
Plenty of ink has been spilled about the death of the department store, mainly thanks to the onset of fast fashion and online shopping. But the 61-year-old retailer has managed to avoid store closures — and unlike some of its competitors, Kohl’s has been opening more physical locations. Back in 2022, the company announced it would be opening 100 new stores over the next four years, bringing its estimated tally to 1,100 stores across 49 U.S. states.
Among its brick-and-mortar strategies: expand by going small. In 2021, the brand tested opening small Sephora shops — or mini versions of the popular beauty retailer — inside Kohl’s locations. The store-within-a-store model worked well enough that company announced it would expand further in 2022. With the new Babies “R” Us deal, Kohl’s now seems to be trying the same blueprint with baby products.
Kohl’s partnership with Babies “R” Us could mean a revival for the baby store chain, which under previous ownership filed for bankruptcy in 2017 and closed most of its stores the following year.
As for Kohl’s, the retailer beat Wall Street expectations after it reported its fourth quarter 2023 earnings, but reported that net sales for that quarter still fell 1.1% to $5.7 billion. Kohl’s issued a cautionary outlook for its 2024 fiscal year, with net sales decreasing 1% to increasing by 1%. It expects earnings per share to between $2.10 and $2.70, for the upcoming fiscal year.