WAUWATOSA, Wis. -- Kohl's Corp.'s new Off/Aisle store has a polished concrete floor, sleek lighting fixtures and a way of pricing merchandise that is very different from the Menomonee Falls retailer's traditional department stores.
No coupons or special discounts here. At Off/Aisle, everything has a "spot" price. Items with an orange circle on the tag are $4; items with a blue circle, $6. Prices range from $4 to $70, most on the lower end of that scale.
Kohl's opened its first Off/Aisle store in New Jersey in June. Two Milwaukee-area stores -- in Wauwatosa at the Mayfair Collection and on Sunset Drive in Waukesha -- are its second and third.
"It's very different from a typical Kohl's store," said Rick Schepp, chief administrative officer of Kohl's. "It doesn't have all the fancy fixtures."
Off/Aisle's target is women, specifically women who love to shop. There are fewer pieces of each item, so shopping is more of a hunt, and the store does not take returns, Schepp said.
Merchandise will change quickly and be mostly in season, Schepp said. The stores are a good place for Kohl's to sell merchandise that isn't stocked in its traditional stores but has been returned to them by online customers, he said. Those goods previously would have been sold to wholesalers, he said.
The New Jersey Off/Aisle store didn't cannibalize sales at the traditional Kohl's about a mile down the road, Schepp said.
Kohl's move into the off-price business comes as traditional department stores have struggled and off-price retailers have flourished. Kohl's is not the only traditional department store to take an "if you can't beat 'em, join'em" approach. Macy's opened a number of off-price stores called Macy's Backstage in the New York area last fall.
Ross Stores Inc. and TJX Cos., both off-price chains, are the only companies covered by Morgan Stanley's retail analysts that have delivered earnings growth every year in the past decade, the investment firm said in a report released last week.
Kohl's said in February that its profit for 2015 dropped 22 percent, to $673 million, and that it planned to close 18 underperforming stores.
The retailer in October announced plans for more store sizes and formats. It is planning to open 5 to 10 new 35,000-square-foot stores, more than half the size of a typical Kohl's store. Kohl's also plans to open 10 to 15 new Fila apparel and footwear stores in outlet malls.
Business on 03/29/2016