Kohl’s Corp. will close 18 stores this year as the Milwaukee-area company seeks to cut costs and find the proper balance between its extensive brick-and-mortar presence and its increasingly important online business.
The as-yet-undisclosed stores to be shuttered represent a small slice of Kohl’s nationwide portfolio, but the move is an unusual step for a retailer that throughout the 2000s pursued aggressive expansion.
Closing the underperforming locations, however, will free cash that can be invested in more promising initiatives.
“We need to really place our bets on the things that are working and acknowledge where we have assets or resources in things that are not working as well,” CEO Kevin Mansell said in an interview.
He said the stores that will be closed account for less than 1 percent of the company’s sales.
Kohl’s announced the plans Thursday as it formally released its fourth-quarter financial results.
The company earlier this month had already reported that its full-year earnings per share would be less than expected, and that it would post only modestly higher same-store sales for the quarter and the year.
On Thursday the firm said revenue for the three months ended Jan. 30 totaled $6.39 billion, up 0.8 percent from a year ago. Net income was $296 million, down 20 percent.
Earnings per share for the quarter came in at $1.58, down from $1.83 a year ago, but two cents better than analysts’ average estimate.
Like many retailers, Kohl’s is wrestling with the growing shift of shopping to online outlets. Its digital business has been growing rapidly too, but not rapidly enough to lift its sales from the lackluster level of the last few years. Since 2011, Kohl’s annual revenue has grown just 2.1 percent.
The company has launched a sweeping series of initiatives — the “Greatness Agenda” — intended to lift its performance. While the effort has notched some successes, it has fallen well short of the pace needed to achieve Kohl’s stated goal of raising revenue by $2 billion, to $21 billion, in 2017.
Investors, meanwhile, have punished the firm. After Kohl’s signaled earlier this month that its earnings would be less than expected, its share price dropped nearly 19 percent in one day.