August 23, 2022
Sephora @ Kohl’s store-in-a-store concept is working very well for both retailers a year after its debut. The numbers seem to confirm this. So why hasn’t all the good news surrounding this partnership done more for Kohl’s bottom line – or is that just too much to ask?
Last week, Kohl’s said it was rolling out Sephora @ Kohl’s stores to all remaining stores that didn’t already have them. Current plans are to have 850 stores operational by next year before rolling out the concept to the rest of Kohl’s stores.
The retailer said the remaining approximately 300 stores (Kohl’s has more than 1,100 nationwide) will have Sephora stores designed with a smaller footprint than the typical 2,500 square foot configuration currently in its stores.
“We are incredibly proud of how our businesses have come together so seamlessly to create a truly unprecedented and unique in-store experience,” Michelle Gass, CEO of Kohl’s, said in a statement. statement. “We couldn’t be happier with how our partnership with Sephora continues to work and achieve the goals we set for ourselves. Our success to date proves that this partnership works, and this expansion is the next exciting chapter in our story together.
Sephora @ Kohl’s has been a success story with the first 200 stores opening in 2021 maintaining high single-digit percentage sales gains. The nearly 400 stores opened this year produced mid-single gains. The concept is expected to generate $2 billion in annual sales by 2025.
Customers who buy Sephora @ Kohl’s tend to be new to the chain, younger, and more diverse than its typical customers. Kohl’s says it has acquired more than one million new customers since launching the in-store beauty concept and that these customers visit more frequently than Kohl’s shoppers alone. About half of beauty shoppers attracted to Kohl’s also shop in at least one other category of the store.
Ms Gass, speaking last week on Kohl’s second trimester earnings callsaid Sephora @ Kohl’s is “a cornerstone” of its company’s strategy to become “the leading destination for the active, casual lifestyle.”
Kohl’s CEO said the two companies are looking for other opportunities to work together.
“We are currently testing BOPIS business-to-business, where purchases made on Sephora’s website, sephora.com, can be picked up at Kohl’s stores, creating an incredibly seamless and convenient experience for our customers,” she said. declared.
DISCUSSION QUESTIONS: Is Kohl betting too much on his relationship with Sephora to improve his bottom line? What are the other cornerstones on which Kohl’s builds its business besides Sephora?
“Kohl’s should strive to replicate the success of the partnership with Sephora in other sections of its store.”