WOODLAND PARK, N.J. — Kohl’s is gearing up for a significant expansion by introducing Babies R Us shops within its stores nationwide, with plans to have 200 locations operational by the end of September. This strategic move will see Kohl’s offering a broader range of baby merchandise, including strollers, car seats, and baby care products, which were previously absent from their inventory that primarily focused on baby clothing.
The Wisconsin-based retailer aims to cater to young families preparing for new additions, decorating homes, or getting ready for back-to-school. Most Kohl’s stores are located in suburban strip malls, making them convenient for busy parents. CEO Tom Kingsbury estimated that these expanded categories, including Babies R Us, represent a “$2 billion-plus sales opportunity” in the coming years.
Despite U.S. birth rates being at their lowest in over 40 years, Kohl’s is optimistic about capturing market share. Chief Merchandising Officer Nick Jones showcased the first Babies R Us shop in New Jersey, highlighting how customers can see and feel high-end items like strollers and cribs outside of their packaging. The shops feature prominent baby brands such as Hatch, Frida, Graco, and BabyBjorn.
The retailer’s website now offers Babies R Us products, doubling the number of items available in physical stores. A baby registry is also set to launch in the fall, along with exclusive maternity clothing from Motherhood and baby apparel from Nike.
Kohl’s initiative comes at a time when it needs new growth drivers. The company reported $16.6 billion in net sales for the last fiscal year, a nearly 14% decline from five years ago. The company expects a further 2% to 4% decline in net sales this year and posted a $27 million net loss for the fiscal first quarter.
Shares of Kohl’s have dropped 24% this year, trailing behind the S&P 500’s nearly 16% gains. Kohl’s has faced challenges with discretionary spending down as consumers prioritize essential expenses. According to Dana Telsey of Telsey Advisory Group, Kohl’s needs to sharpen its merchandise offerings to attract customers amidst fierce competition.
The baby gear market, despite lower birth rates, remains stable as parents are willing to spend on premium items. Baby gear sales totaled $7.5 billion for the year ending in May, driven by demand for high-end products.
Kohl’s partnership with WHP Global, the owner of the Babies R Us brand, aims to revitalize the brand with a contemporary look while leveraging modern marketing tools like Instagram and TikTok influencers to attract today’s parents. This strategic move aims to rejuvenate Kohl’s sales and attract a new generation of shoppers.
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