Plans For Kohl’s Closings in 2022

Joel Eisenberg

The largest department store chain in the world is for sale, and engaged in exclusive talks with a potential buyer.

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Kohl’siStock

Author’s Note

This article is based on corporate postings and accredited media reports. Linked information within this article is attributed to the following outlets: CNN.com, Wikipedia.org, Retail-Insight-Network.com, ModernRetail.com, and FootwearNews.com.

Introduction

On June 7, CNN.com published “Kohl’s Puts Up a For-Sale Sign,” which reported on current company goals: Kohl’s (KSS) said late Monday that it had entered into a three-week exclusive negotiation period for a potential sale with Franchise Group (FRG), a holding company which owns The Vitamin Shoppe and other retail brands. Franchise Group has proposed to buy Kohl’s for $60 a share. Kohl’s stock closed at $42.12 on Monday and rose 10% during early trading Tuesday on the news. The deal would value Kohl’s at around $8 billion, The Wall Street Journal reported, about 5 times more than it was worth last week. Kohl’s said that during the negotiation period there were no assurances a deal would be reached.

The company for sale is identified in the article as the nation’s largest department store, with over 1,100 US stores and approximately $19 billion in annual sales.

Indeed, according to ScrapeHero.com: There are 1,156 Kohls locations in the United States as of June 19, 2022. The state with the most number of Kohls locations in the US is California, with 117 locations, which is 10% of all Kohls locations in America.

Has the company been sold since the CNN piece? Have strategies been implemented in either case, including the imminent closures of underperforming locations?

Let us explore further.

Kohl’s, 2022

Wikipedia.org features a comprehensive overview of the Kohl’s retail chain: The company was founded by Polish immigrant Maxwell Kohl, who opened a corner grocery store in Milwaukee Wisconsin in 1927. It went on to become a successful chain in the local area, and in 1962 the company branched out by opening its first department store. British American Tobacco Company took a controlling interest in the company in 1972 while still managed by the Kohl Family, and in 1979, the corporation was sold to BATUS Inc. A group of investors purchased the company in 1986 from British American Tobacco and took it public in 1992.

In recent years, though the company has retained its status as the country’s largest department store, revenues have notably fallen, in large part, according to analysts, due to the pandemic and new online shopping habits.

Retail-Insight-Network.com reported on negative first-quarter 2022 revenues: US-based department store chain Kohl’s has recorded revenue of $3.71bn in the first quarter (Q1) of the fiscal year 2022 (FY22), down by 4.4% against $3.88bn in the same period of FY21. During the three months to 30 April, the company’s net sales and comparable sales were $3.7bn, down by 5.2% from $3.9bn a year earlier. Kohl’s Q1 gross margin was 38.3%, dropping by 69 basis points (bps) from the same period of last year, when it recorded 39.0%.

It appears, though, that falling revenues have been a trend, even prior to the pandemic. Per ModernRetail.com: For years, Kohl's has struggled to grow consistently. Even pre-pandemic, in 2019, its annual revenue was below 2018 figures. Its 2020 full-year revenue dropped even further to about $16 billion from about $20 billion the previous year.

Kohl’s is still in exclusive talks to sell to its potential buyer, but no deal has yet been consummated. In the meantime, though some store closures have taken place over the past few years and 10 leases are set to expire in 2023, talks continue.

See here for the next potential round of closures, according to FootwearNews.com.

Conclusion

I will update readers here in the event of a successful Kohl’s sale. For now, the company remains open for business, and engaged in continued discussions.

Thank you for reading.

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I am an award-winning author, screenwriter for film and television, and producer. My mission on News Break is to share socially important perspectives on both culture and pop-culture. Member of PEN America, and the WGA.

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