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Kohl’s Will Shutter Off/Aisle Off-Price Stores

Kohl’s Will Shutter Off/Aisle Off-Price Stores

Kohl’s is closing its four Off/Aisle stores, ending the department store’s off-price experiment after four years.The four Off/Aisle locations — three located in Wisconsin and one in New Jersey — will close Aug. 3, Jon Grosso, an EVP and Director of Store Operations, told staff in an internal memo.

The retailer launched Off/Aisle in 2015 as an outlet to sell discount items that customers had returned to Kohl's department stores. Kohl’s positioned the stores to compete with off-price retailers such as TJX and Ross Stores, as well as Nordstrom Rack and Macy’s Backstage, which debuted around the same time. At the time, Kohl’s experimented with various store formats, also opening more agile, 35,000-square-foot mall stores in underserved markets.

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"While we've learned a lot from the tests, we also learned that our strength and ongoing improvements in inventory management across the company do not allow us to appropriately stock Off/Aisle stores at scale," Grosso told employees. Grosso did not indicate whether the stores were closing due to a lack of success, and Kohl’s has not revealed any statistics related to the stores.

Employees at the stores can transfer to other Kohl's locations nearby, said Grosso.

While this test run is over, Kohl’s has certainly continued to run its fair share of experiments as it ponders how to maximize the potential of its brick-and-mortar business. Starting in July, Kohl’s is accepting free, unpackaged returns for products bought on Amazon across its entire store base of 1,150+ locations. The returns program is expanding two years after the company first piloted it in select markets. In Chicago-area test stores, both sales and new customers saw major increases.

Kohl’s is even dividing up select physical locations, to make room for tenants such as Aldi and Planet Fitness, in an effort to attract consumers who otherwise might not enter and shop at a Kohl’s store.

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