Kohl's Corp. said March 1 that it will bring Germany-based discount retailer Aldi to five to 10 of its stores in a bid to cut real estate costs.
Kohl's CEO Kevin Mansell said during its fourth-quarter earnings call with investors that the company will continue rightsizing at its stores to reduce inventory and increase margins. Mansell said that Aldi will be given space at Kohl's stores as part of a pilot program. The move will give Kohl's an opportunity to leverage its real estate.
Answering a question about the number of stores for which Kohl's could potentially partner with Aldi, Mansell said the company plans to rightsize 500 stores by the end of 2018 and will move from a "standard footprint" to a small footprint. He said transformation toward small stores had resulted in a "phenomenal" improvement in customer engagement.
Mansell said Kohl's was focused on retailers with "good, strong balance sheets and outlooks." Apart from grocers and supermarket chains, retailers operating in other areas, including fitness, also could partner with Kohl's, he added.
