Kohl’s plans to open 200 Babies R Us stores in its stores by the end of September. The retailer will sell a variety of baby products, including strollers, car seats and cribs.
Courtesy: Cole’s
Woodland Park, New Jersey— Kohl’s Thinking small to increase sales.
The retailer will open Babies R Us stores in existing stores nationwide starting this week, with plans to open 200 stores by the end of September. The stores will sell a variety of baby merchandise the company has never offered before, including shampoo, strollers and car seats. Kohl’s previously only sold baby clothing.
With the move, the Wisconsin-based retailer aims to cater more to the needs of young families, whether they’re renovating their homes, preparing for back to school or preparing for a new addition. Most of the retailer’s approximately 1,170 stores are located in suburban strip malls, making it a short drive for busy parents to run errands or buy groceries.
In addition to the baby category, Kohl’s also expand its variety Home decor, gifts and impulse items. Chief Executive Tom Kingsbury estimated in late May that these expanded categories, including Babies R Us, would represent “a sales opportunity in excess of $2 billion” over the next few years.
However, America’s demographics did not work in Cole’s favor. There were 3.59 million births in the United States last year, according to provisional data from the National Center for Health Statistics. This is the lowest number of births in more than 40 years.
Chief merchandising officer Nick Jones showed off the first Babies R Us store during a store tour in New Jersey on Wednesday. Customers walking through the location can see and touch many of the higher-priced items, such as strollers, cribs and high chairs, outside the cardboard boxes. The stores include many well-known baby brands, including Hatch, Frida, Graco and BabyBjorn.
Online shoppers have also seen Babies R Us on the Kohl’s website over the past few weeks. The company said it has twice as many items on its website as the roughly 800 to 1,000 items found in most stores. Kohl’s will also launch a baby registry in the fall.
Each store will vary in size but will be set up alongside the baby and children’s clothing currently in all stores. Jones said more products for pregnant women are also coming soon, including Nike baby clothing. The company is launching maternity clothing under the direct-to-consumer brand Motherhood, which will be sold exclusively in Kohl’s stores.
The retailer opened Babies R Us stores at a time when it needed growth momentum. Kohl’s Net Sales Total revenue for the most recent fiscal year ended in early February was $16.6 billion. That’s down nearly 14% from five years ago.
Cole expects the current Full-year net sales will decline 2% to 4%. it Unexpected net loss of $27 million It lowered its full-year forecast in late May.
Kohl’s shares are down 24% this year, lagging the S&P 500’s nearly 16% gain over the same period.
Similar to other retailers, Kohl’s is facing challenges from some shoppers who are postponing non-essential purchases while spending more on everyday expenses like groceries and housing. However, Cole’s challenges don’t stop there, according to him Dana Telsey, CEO and Chief Research Officer of Telsey Consulting Group. She said the company needs to improve its merchandise to attract the attention of new and existing customers.
“There’s a lot of competition from other people,” she said. “Brands have to stand for something and matter.”
In Kohl’s Babies R Us stores, customers can touch and feel some of the more expensive items on their shopping list or registry.
Courtesy: Cole’s
Lower birth rate but higher quality products
Kohl’s is betting on the baby category as innovative products and high-end products like premium strollers drive consumption.
Sales of baby products totaled $7.5 billion in the 12 months through May, up 4% from the same period in 2020, according to Circana, a market research firm that tracks the sector. It includes items such as car seats, strollers, bottles, bassinets, high chairs, cribs and breastfeeding systems.
Stephen Hinz, an industry consultant who tracks baby product sales at Circana, said consumers’ willingness to buy high-quality baby products drives spending.
He noted that the U.S. Census Bureau Discover Median age of U.S. women giving birth Already 30 years old.
“People were in a completely different stage of life back then,” he said. “They’re older. They’re more established in their careers. They’re more likely to own their own home. They have more disposable income. Those have a greater impact on what they might choose to bring into their home.”
Hinz said the market remains stable despite lower birth rates as parents seek more upscale products, such as natural wood cribs and car seats that swivel to make it easier to get babies in and out. Even during tough economic times, families increase their budgets to support their children’s health and safety, he said.
Additionally, new parents have more retailers and brands to choose from, as well as new ways to register for baby products. big box chain Target and Walmart Expanded baby department. macy’s department store Launched its own baby registry in late April. Universal registries such as Zola and Babylist are popular because they allow customers to select items on retailer and brand websites.
Kingsbury told CNBC in March that market share in the category is up for grabs. He pointed to the bankruptcy and store closings of Bed Bath and Beyond, the parent company of Buy Buy Baby.
He also said customers who shop at Babies R Us also shop in other departments.
Kohl’s is making a similar move to Sephora Beauty Stores by opening Sephora Beauty Stores in all of its stores. During an earnings call, Kohl’s leaders said the stores Attract younger and more diverse customers.
Jones said Kohl’s will decide whether to open Babies R Us in more stores after consulting with the first 200 stores.
Kohl’s will open Babies R Us stores next to its existing baby apparel. It has also added related merchandise, such as Nike’s baby clothing and Motherhood’s maternity clothing.
Courtesy: Cole’s
Is Babies R Us still relevant?
In relaunching Babies R Us, Kohl’s will test whether the brand is still relevant or has become outdated.
The brands of Babies R Us and its former parent company Toys R Us are now owned by New York City-based brand management firm WHP Global. The company has Acquired and attempted to rebuild other brands, including Bonobos, Rag & Bone and Isaac Mizrahi. Toys R Us closed its stores after filing for bankruptcy in 2017.
Kohl’s and WHP Global, The deal was announced in Marchfinancial terms of the agreement have not been disclosed.
In addition to the Kohl’s deal, WHP Global also has an agreement with Macy’s, which has Open a Toys R Us store in its many department stores.
Babylist founder and CEO Natalie Gordon said Kohl’s move was risky because tastes have changed since the brand’s heyday in the 1980s and 1990s.
She said many retailers had a poor customer experience, with little opportunity to test products in person. She recalled her frustration with retailers as she was preparing to have her first child about 13 years ago, which sparked the idea for Babylist.
“I felt naive about those brands,” she said. “It was pink and blue and had little cartoon characters on it. And I was a woman giving birth. It really didn’t resonate at all.”
Kohl’s chief marketing officer Christie Raymond said the latest version of Kohl’s Babies R Us uses a familiar brand font, but Kohl’s and WHP gave the brand a more modern look.
“There’s a lot of credibility,” she said. “But we do need to modernize.”
Stores are decorated with stylish baby photos instead of pastels or cartoon mascots, such as Toys R Us’ Jeffrey the Giraffe.
Kohl’s will use marketing tools that didn’t exist during Babies R Us’s heyday. The company plans to partner with influencers who can promote the stores on Instagram and TikTok.
