Kohl’s is going outside the box in an effort to boost real estate value and bring in more shoppers. The department store will lease space to Planet Fitness to open 10 gyms adjacent to select Kohl's locations across the U.S. in 2019. Planet Fitness will leverage approximately 20,000 to 25,000 square feet of space next to each of the select Kohl's stores in various markets throughout the country.
The partnership leaves opportunity for Planet Fitness to set up additional locations next to Kohl’s stores in the future. As part of the strategy, the Kohl’s stores will downsize their existing space, although there is no confirmation of how much they will change. While Planet Fitness presently has 1,700+ stores, the company wants to double its U.S. footprint to nearly 4,000 stores.
The announcement came the same week as the company’s Q4 earnings report, in which Kohl’s saw:
- Full-year comparable sales increase 1.7%;
- Q4 comparable sales increase 1%; and
- Total Q4 revenue decrease by 3.3% to $6.8 billion.
"We continue to see our Rightsizing strategy as an important initiative to not only leverage our real estate assets but also drive traffic to our stores through key partnerships," said Michelle Gass, Kohl's CEO on the company's Q4 earnings call. "We see the Rightsizing strategy as a large opportunity for Kohl's."
Kohl's also will expand its plus-size product options with Nike in an effort to further position the company "as an active and wellness destination for the entire family.”
In recent years Kohl’s has added new athleticwear to its lineup, including products from Under Armour and Fitbit.
The retailer partnered with Amazon in 2017 to offer free online returns and mini-Amazon shops within some stores, but Amazon intends to shut these down by April. Last year, Kohl’s announced a pilot program with supermarket chain Aldi to lease out space in a 10-store pilot.
In January, the department store revealed a pilot program with WW (previously known as Weight Watchers) for an in-store WW Studio in Chicago. The retailer also will offer WW Healthy Kitchen products this summer in select stores and online.
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