WOODLAND PARK, N.J. \u2014\u00a0Kohl\u2019s\u00a0is thinking small to rev up its sales.<\/p>\n
The retailer is opening Babies R Us shops in its existing stores across the country starting this week, and plans to have 200 by the end of September. The shops will carry a variety of baby merchandise that the company hasn\u2019t offered before, including shampoo, strollers and car seats. Kohl\u2019s previously sold only baby clothing.<\/p>\n
With the move, the Wisconsin-based retailer aims to cater more to young families, whether they\u2019re decorating their homes, getting ready for back-to-school or preparing for a new addition. Most of the retailer\u2019s approximately 1,170 stores are in strip malls in the suburbs, a short drive for busy parents who are running errands or shopping for groceries.<\/p>\n
Along with the baby category, Kohl\u2019s is also\u00a0bulking up its assortment\u00a0of home decor, gifting and impulse items. CEO Tom Kingsbury estimated in late May that those expanded categories, including Babies R Us, are \u201ca $2 billion-plus sales opportunity\u201d in the coming years.<\/p>\n
Yet U.S. demographics aren\u2019t tipped in Kohl\u2019s favor. Births in the U.S. totaled 3.59 million last year, according to provisional data from the U.S. National Center for Health Statistics. That\u2019s the lowest number of births in more than 40 years.<\/p>\n
On a store tour in New Jersey on Wednesday, Chief Merchandising Officer Nick Jones showed off the first Babies R Us shop. Customers who walk through the location can see and feel many pricier items, such as strollers, cribs, and high chairs, outside of the cardboard box. The shops include many prominent baby brands, including Hatch, Frida, Graco and Baby Bjorn.<\/p>\n
Kohl\u2019s will put Babies R Us shops next to its existing baby apparel. It is also adding related merchandise, such as baby clothing from Nike and maternity clothes from Motherhood.<\/span>Courtesy Kohls<\/span><\/p>\n Over the past few weeks, online shoppers have also seen Babies R Us on Kohl\u2019s website. Its website has twice as much merchandise as the approximately 800 to 1,000 items available in most shops, the company said. Kohl\u2019s will also launch a baby registry in the fall.<\/p>\n Each shop will range in size, but will be set up next to the baby and kid\u2019s clothing that\u2019s currently in all stores.\u00a0<\/strong>Jones said more merchandise is on the way for expecting families, too, including baby apparel from Nike. It is introducing maternity clothing from Motherhood, a direct-to-consumer brand, which will be exclusive to Kohl\u2019s stores.<\/p>\n The retailer is rolling out Babies R Us shops at a time when it needs growth drivers. Kohl\u2019s net sales\u00a0<\/strong>totaled $16.6 billion in the most recent fiscal year, which ended in early February. That\u2019s a nearly 14% drop from five years ago.<\/p>\n Kohl\u2019s expects current\u00a0<\/strong>full-year net sales to decline between 2% and 4%. It\u00a0posted a surprise net loss of $27 million\u00a0for the fiscal first quarter and lowered its full-year forecast in late May.<\/p>\n Kohl\u2019s shares are down 24% this year, trailing the S&P 500\u2032s nearly 16% gains during the same period.<\/p>\n Like other retailers, Kohl\u2019s has contended with shoppers who are putting off discretionary purchases while spending more on everyday expenses like groceries and housing. Yet Kohl\u2019s challenges go beyond that, according to\u00a0<\/strong>Dana Telsey, CEO and chief research officer of Telsey Advisory Group. She said it needs to sharpen its merchandise to grab the attention of new and existing customers.<\/p>\n \u201cThere\u2019s been so much competition from others out there,\u201d she said. \u201cA brand has to stand for something and matter.\u201d<\/p>\n Inside of Kohl\u2019s Babies R Us shops, customers can touch and feel some of the pricier items that may be on their shopping list or registry.<\/p>\n Kohl\u2019s is betting on the baby category as innovative products and higher-end items like fancy strollers drive spending.<\/p>\n Baby gear sales totaled $7.5 billion for the 12-month period that ended in May, up 4% from the same time period in 2020, according to Circana, a market research firm that tracks the space. It includes a wide range of items like car seats, strollers, bottles, bassinets, high chairs, cribs and breast feeding systems.<\/p>\n Stephen Hinz, an industry advisor at Circana who tracks sales of baby products, said customers\u2019 willingness to pay for premium baby gear has fueled spending.<\/p>\n He noted the U.S. Census Bureau has\u00a0<\/strong>found that the\u00a0median age of U.S. women giving birth\u00a0is 30 years old.<\/p>\n \u201cPeople are in a much different life stage at that point,\u201d he said. \u201cThey\u2019re older. They\u2019re more established in their careers. They\u2019re more likely to own a home. They have more disposable income. And those have greater influence on the things that they might choose to bring into those homes.\u201d<\/p>\n Hinz said the market has remained stable, despite the lower birth rate, as parents spring for fancier items like natural wood cribs and car seats that rotate to make it easier to get a baby in and out. And families will stretch their budgets to support a child\u2019s health and safety even during tougher economic times, he said.<\/p>\n Inside of Kohl\u2019s Babies R Us shops, customers can touch and feel some of the pricier items that may be on their shopping list or registry.<\/span>Courtesy Kohls<\/span><\/p>\n Plus, new parents have more retailers and brands to choose from and new ways of registering for baby items. Big-box chains\u00a0Target\u00a0and\u00a0Walmart\u00a0have expanded their baby departments.\u00a0Macy\u2019s\u00a0launched its own baby registry in late April. And universal registries, such as Zola and Babylist, have gained popularity by allowing customers to choose items across retailers\u2019 and brands\u2019 websites.<\/p>\n In an interview with CNBC in March, Kingsbury said there\u2019s market share up for grabs in the category. He referred to the bankruptcy and store closures of Bed Bath and Beyond, the parent of Buy Buy Baby.<\/p>\n And, he said, customers who shop at Babies R Us will also buy items in other departments.<\/p>\n Kohl\u2019s is making a similar move to what it\u2019s done with Sephora beauty shops, which it is opening in all of its stores. On earnings calls, Kohl\u2019s leaders have said the shops are\u00a0drawing younger and more diverse customers.<\/p>\n Jones said Kohl\u2019s will decide whether to open Babies R Us in more stores after learning from the first 200 shops.<\/p>\n Kohl\u2019s will put Babies R Us shops next to its existing baby apparel. It is also adding related merchandise, such as baby clothing from Nike and maternity clothes from Motherhood.<\/p>\n As it relaunches Babies R Us, Kohl\u2019s will test whether the brand has remained relevant or grown stale.<\/p>\n The brands of Babies R Us and its former parent Toys R Us are now owned by WHP Global, a New York City-based brand management company. The firm has\u00a0<\/strong>bought and tried to rebuild other brands including Bonobos, Rag & Bone and Isaac Mizrahi. Toys R Us shuttered its stores after filing for bankruptcy in 2017.<\/p>\n Kohl\u2019s and WHP Global, which\u00a0announced the deal in March, have not disclosed the financial terms of the agreement.<\/p>\n Along with the Kohl\u2019s deal, WHP Holdings also struck an agreement with Macy\u2019s, which has\u00a0opened Toys R Us shops\u00a0in many of its department stores.<\/p>\n Kohl\u2019s move is risky since tastes have changed since the brand\u2019s heyday in the \u201980s and \u201990s, said Natalie Gordon, founder and CEO of Babylist.<\/p>\n She said many retailers have fallen short on their customer experience with little chance to test products hands-on. And she recalled her frustrations with retailers when she got ready to have her first child about 13 years ago, which sparked the idea for Babylist.<\/p>\n \u201cI felt infantilized by the brands that were out there,\u201d she said. \u201cThings were pink and blue with little cartoon characters. And I\u2019m a woman having a baby. It really didn\u2019t resonate at all.\u201d<\/p>\n The latest version of Babies R Us at Kohl\u2019s features the familiar brand font, but Kohl\u2019s and WHP gave the brand a more contemporary look, said Christie Raymond, Kohl\u2019s chief marketing officer.<\/p>\n \u201cThere\u2019s a lot of credibility,\u201d she said. \u201cBut we did need to modernize.\u201d<\/p>\n The shops are decorated with sleek baby photos rather than pastels or cartoon mascots, such as Toys R Us\u2019 Geoffrey the giraffe.<\/p>\n And Kohl\u2019s will use a marketing tool that didn\u2019t exist during Babies R Us\u2019 peak: it plans to partner with influencers who can spread the word about the shops on Instagram and TikTok.<\/p>\n<\/p>\n WOODLAND PARK, N.J. \u2014\u00a0Kohl\u2019s\u00a0is thinking small to rev up its sales. The retailer is opening Babies R Us shops in its existing stores across the country starting this week, and plans to have 200 by the end of September. The shops will carry a variety of baby merchandise that the company hasn\u2019t offered before, including […]<\/p>\n","protected":false},"author":0,"featured_media":7191,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-7190","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/7190","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=7190"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/7190\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/7191"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=7190"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=7190"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=7190"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}