Kohl’s Plans 27 Store Closings, Adding to National List in New Year

Kohl’s Plans 27 Store Closings, Adding to National List in New Year

Kohl’s has announced plans to close 27 stores across 15 states and an e-commerce fulfillment center in San Bernardino, California, by mid-2025. This move comes as the retail giant grapples with ongoing challenges in a competitive and evolving industry landscape.

Closures Include Underperforming Stores and Major Distribution Hub

The closures include underperforming locations and the 575,000-square-foot San Bernardino warehouse, which has been operational since 2010. The warehouse, a key part of Kohl’s e-commerce supply chain, is slated to close as the company adjusts its fulfillment operations.

Kohl’s cited increasing competition from online retailers like Amazon and budget chains such as Walmart and T.J. Maxx as driving factors behind the decision to streamline its operations and reduce costs.

Industry-Wide Trend of Store Closures

The announcement adds to a growing list of store closures among major retailers. Macy’s recently revealed plans to close 66 locations in early 2025, meaning that Kohl’s and Macy’s combined will shut nearly 100 stores nationwide in the coming year.

Leadership Changes Amid Declining Sales

The closures follow a period of financial challenges for Kohl’s. In Q3 2024, the company reported an 8.8% drop in net sales and a 9.3% decline in comparable sales, reflecting broader difficulties in the retail sector.

Leadership changes are also underway, with Ashley Buchanan, former CEO of Micha-, set to replace Tom Kingsbury as CEO. Kingsbury had succeeded Michele Gass, who departed in 2023. Buchanan’s appointment reflects the company’s focus on innovation and digital transformation to better compete in a challenging market.

Financial Impact of Closures

Kohl’s anticipates pre-tax charges from the closures to range between $60 million and $80 million, with estimated cash expenditures of $30 million to $50 million. The company expects these moves to help improve efficiency and focus resources on its more profitable locations and online channels.

Adapting to Retail Challenges

As Kohl’s moves into 2025, it faces significant hurdles in maintaining its market position amid the rise of e-commerce and shifting consumer preferences. The closures and leadership changes are part of a broader strategy to navigate these challenges and align the company with the evolving demands of the retail landscape.

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Source: CoStar