Simon Property Group and Brookfield Asset Management have reportedly made an offer to acquire Kohl’s in a deal that would value the retailer at $8.6 billion, a person familiar with the matter told the New York Post. The firms plan to slash Kohl’s operating costs by $1 billion over the next three years, in part by merging some operations with JCPenney, which is owned by Simon and Brookfield.
Kohl’s and JCPenney would remain separate brands but could share a single management team, according to the source. The retailers’ information technology systems also would be merged, and both companies would have their private label apparel manufactured by a single in-house label.
Additionally, Kohl’s would cut costs further by ending its plans for additional Sephora store-in-store locations. These retailers are currently collaborating on the launch of 850 co-located shops by 2023, with plans for 600 across 36 states by the end of 2022. The New York Post did not report on whether the proposed changes would affect Kohl’s plans to open more than 100 smaller-format stores.
Kohl’s has already confirmed that it is in talks with potential suitors. While the retailer has not officially confirmed which companies are bidding, Hudson’s Bay Company and Sycamore Partners are reportedly in the mix. Kohl’s rejected a reportedly $9 billion offer from Sycamore Partners and Acacia Research in February 2022 and has resisted spinning off its ecommerce business even as it continues to pursue a potential sale.
Neither Simon Property Group nor Brookfield Asset Management responded to Retail TouchPoints’ inquiries prior to publication.