Some shrunken Kohl's stores are getting a new neighbor: Planet Fitness gyms.
Kohl's, which is on a mission to shrink its biggest department stores, said it will lease or sell the newly empty space at 10 locations to Planet Fitness, but may increase that number in the future. The new neighbor won't share doors with Kohl's, but it hopes that those who frequent Planet Fitness will also stop at Kohl's to buy fitness trackers, workout tights or sneakers. The companies plan to promote each other to their customers.
The company has a similar deal with no-frills German grocer Aldi, which is opening groceries next door to Kohl's stores. Planet Fitness said its Kohl's-adjacent gyms will be between 20,000 square feet and 25,000 square feet.
Kohl's also has been working to increase the brands it carries in stores and is getting rid of ones that aren't connecting with shoppers. The strategy seems to be working: Kohl's reported Tuesday sales rose 1 percent at established stores during the holiday shopping season.
Shares of Kohl's Corp. closed up 7.31 percent Tuesday.
Wisconsin-based Kohl's, which has more than 1,100 stores, also reported its fourth-quarter profit fell 42 percent to $272 million, lowered by taxes, store closings and other costs. Its adjusted earnings per share came to $2.24, beating Wall Street analysts' expectations. Revenue fell 3 percent to $6.8 billion in the three months ending Feb. 2.
Kohl's also said it is expanding its partnership with online retail giant Amazon, selling Kindle tablets, Echo voice-activated devices and other gadgets in more than 200 stores. Amazon already had a presence in about 100 Kohl's stores, but Kohl's is moving away from Amazon shops inside Kohl's, where Amazon workers helped shoppers. Instead, there will be a dedicated Amazon section in Kohl's, where customers can help themselves.
"It will be more in a self-serve environment, which is how our customers are used to shopping," said Kohl's CEO Michelle Gass.