Goodbye J.C. Penney. Hello Kohl’s. That’s one of the takeaways from yesterday’s announcement that Sephora and Kohl’s have reached a long-term deal to open co-marketed beauty product shops in 200 Kohl’s by next fall with an ongoing rollout that will see the store-within-in-a-store concept growing to at least 850 locations by 2023.
The “Sephora at Kohl’s” shops are being billed as immersive premium beauty product destinations. Kohl’s will locate the 2,500-square-foot shops at the front of their stores. Each shop will feature 100 brands curated to appeal to the 70 percent of Kohl’s 65 million customers who are women.
Shops will be staffed by Beauty Advisors trained by Sephora. The goal is to provide Kohl’s customers with a similar experience to what they would enjoy at a standalone Sephora store.
Sephora will sell its products on Kohls.com in addition to stores, and purchases will be eligible for Sephora’s Beauty Insider rewards. The two retailers said they will integrate their e-commerce sites to allow shoppers on Sephora.com to find nearby stores from either chain. Customers will be able to make returns to Kohl’s and also take advantage of in-store and curbside pickup at its stores. Kohl’s will own the Sephora inventory and the two retailers will share operating profits generated by the shops.
Kohl’s CEO Michelle Gass called the deal with Sephora a “transformational partnership” in an interview with CNBC. She said the agreement was reflective of her company’s “new strategy to be the destination for all things, active, casual, wellness and beauty for the family.” Kohl’s is in the process of expanding key categories, including beauty, she said, while reducing or eliminating space for others that do not align with the chain’s objectives.
The apparent gain by Kohl’s in its deal with Sephora is unfortunate news for its former store-within-a-store partner, J.C. Penney, which is still looking to fully emerge from Chapter 11 bankruptcy. Rumblings of discontent in the partnership emerged in the spring when Sephora, no doubt concerned about the department store’s struggles and plans to close locations, sought to find a mutually agreed upon exit to a deal scheduled to run through next April.
